I wouldn't tell you all of these things if I hadn't already lived them myself. Both my wife and I went to college and we have sent 3 of our 4 kids through college, debt free. We still have one to go, so our journey is not over. Our goal is to have all four of kids graduate debt free and not have zero debt hanging over their head, and allow for our kids to have a great financial head start on their life. So far, so good!
Taking out a student loan may be an investment into you or your children's future, or not, depends on how you go about doing it and what you do with your degree. But before you go down the yellow brick road of borrowing, think about how this student loan debt will affect your long term finances. The more debt you owe, the less money you'll have to meet your monthly expenses. Keep your student loans (all loans) to an absolute minimum!
1. Minimize Long Term Debt. Save as much as you can before enrolling in college, Every dollar you've saved is one less that you'll have to pay back. Saving is a lot less expensive than paying back with interest. (529 college fund) (invested like this for our family)
2. Search for Scholarships! There are literally thousands of scholarships offered. Search the web and find as many as you can to cut your costs. UNIGO is cool spot to hunt up a scholarship. You're bound to find something there or it will lead you on to something elsewhere. (on-campus scholarships, graduate assistantships) (been here, done this too)
3. Enroll at a less expensive college. Go to your local community college for the first two years. After that look to attend your in-state public school. Or Dual Enroll in an on-line college and take classes while finishing up your last two years of high school (that's what we've done, works well! ).
4. Borrow Federal first. If your have to borrow at all, Federal Student Loans are generally cheaper, readily available and have better repayment terms than private loans. The interest rates on Federal education loans are fixed, while interest rates on most private loans are variable and will increase over the life of the loan. (didn't need to do this, Whew!)
5. Pay while in School. Pay the interest on unsubsidized loans during the in-school and grace periods to prevent the loan balance from growing larger. If you, the borrower, doesn't pay the interest on the loan during the grace period, interest is added to the loan balance. This can increase the loan balance upwards of 15-20%. Just making interest only payments can help minimize excessive debt.
6. Work Part-time during your school years. Just working 10-15 hours/week will help decrease the money you need to borrow, which reduces the money you'll need to pay back.
7. Graduate Early! If you work hard and do what you're supposed to be doing, staying on track, you should graduate in 4 years. Take an extra class or two per semester if you can handle it academically.
8. Don't Switch Majors. Students who switch majors mid-stream take longer to graduate and accumulate more debt.
9. Look for Opportunities that future employers extend to relieve debt. Some medical professions and teachers have these opportunities.
10. Accelerate your Repayment Plan. Pay the highest cost loan of first. Make the required payments on all your loans, but use any extra money to pay off your highest cost loan first, the one with the highest interest rate.
So there you have it. Pay as you play! don't wait around and hope something good is going to happen. Have a good plan and execute it! You can do this without the crazy cost of overwhelming debt, just gotta have some foresight and energy to search out some small wins. You've got this!