Mar 03, 2017 07:53 AM EST
College education definitely has a high price tag these days but does it really lead to soaring student loan debts? Statistics revealed that the average debt of a student who graduated from college is around $37,000. However, not because student loan debt is a problem, it should also be yours. There are many strategies that parents and students can do that will prevent them from being burdened by debt the majority of their adult life.
As parents, saving as early as possible for your child's college education has a lot of benefits. Even if you start with small, the accumulated amount plus the interest over the years will make a lot of difference. Saving should not end with you but you should also encourage your kids to save for their college education once they are old enough to do so. It is also a good time to teach your students to be more financially responsible.
Stay within your budget
Always consider your budget when looking for a college. Weigh the pros and cons of going to a college that is more affordable as opposed to one which will force you to borrow. Also consider how much financial aid the school offers, in-state tuition costs, as well as the cost of living if the university happens to be in another state or city.
Choose a degree with a healthy salary
A lot of students romanticize choosing a college degree but the real world won't be as romantic if you end up having a hard time finding a job because what you chose doesn't have a high market demand. Most of the high paying jobs are those that belong to the STEM programs as well as in finance.
Create a strategy when spending
Even before you go to college, you have to create a strategy how you're going to pay for college. Living within the principle of taking it one day at a time is dangerous ground since there isn't a concrete plan. Remember the very common maxim, "fail to plan and you plan to fail."
If you really have to borrow money for your college, take federal loans as they have lower interest rates and is more lenient when it comes to forgiveness and deferment.
Graduate on time
Graduating on time or accelerating it will save you a lot of money in many ways. First, you will start earning and paying your loan earlier. Staying one more year in college means more expenses rather than income.
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