Right now, there are millions of university graduates struggling with how they are going to payoff their student loan debts. If you are currently a student, and already losing sleep over how much you will owe upon graduation, it’s probably a sign that you need to be taking some action right now.
A certain amount of student loan debt may be entirely necessary in order to earn your degree. But there is plenty that you could do right now that will minimize the amount of debt that you will owe when you graduate. This is important – once you graduate, it will be too late for you to do anything about the amount of student loan debt that you have.
Start by making a realistic estimate of how much you will owe when you graduate. Calculate how much money you’re spending for your education, plus related expenses. Then subtract out the amount that you and your family are able to contribute from your own resources. The amount that is left is very likely what you will owe in student loans.
If that number makes you uncomfortable, it’s time to do what you can to cut it down.
Make Sure Your Career Major Justifies The Debt LevelOne of the first, best steps that you can possibly take right now is to make sure that the major that you are studying will lead to a career that will justify the debt level that you are taking on. For example, if you expect to graduate with greater than $100,000 in student loan debt, your major should lead to a high income career, such as an engineer or a chartered accountant.
A major that will lead to a career paying $40,000-$50,000 per year will make repayment on a six-figure loan very difficult. Now is the time to move into that higher paying major, or to make a big change in the cost of your education.
Attend A More Affordable University
If you are racking up an uncomfortable level of debt, or one that will not be easily repaid on the expected income, you may want to consider switching to a more affordable university. There is a wide range of costs to attend various schools, so you want to make sure that the one you’re at has costs that are consistent with your family’s ability to pay.
If you’re going to a certain school primarily because of its reputation, that may be a luxury that you cannot afford if it requires a substantial amount of debt in order for you to do it. Now is the time to make that kind of change, particularly if you’re either a freshman or sophomore.
Work Your Way Through School
Even if you work every year you’re in school, it can be difficult to accumulate enough money to pay for major expenses, like tuition and room and board. But it will help if you can pay for a lot of other costs with work income, such as food, textbooks, entertainment, transportation, clothing and traveling to and from school.
While none of these smaller expenses may be major contributors to your student loan debt, paying them on a pay-as-you-go basis will keep them from landing in your student loan account.
Related: Part-time Jobs Where You Can Study
Plan on working part-time during the school year, and if possible, full-time during summers. That can provide you with many thousands of dollars in income and a corresponding reduction in the amount of money that you need to borrow for your education.
Avoid Non-School Related Expenses
Everyone needs a certain amount of diversion in their lives to reduce stress and to remind yourself that you’re among the living. But university is an enormous expense, and if you want to reduce your reliance on student loans you’ll have to make some pretty big sacrifices.
The sacrifices might include restricting non-school related expenses. This can include taking vacations, attending concerts, and even the occasional spending spree. While it is easy to justify any of these extravagances – and even to pay for them – collectively they can add up to thousands of dollars, especially over four or more years.
The money that you don’t spend on these activities could be used to pay some of the larger school expenses, including tuition. It’s a trade-off, but you’ll be doing it to help pay for what is probably the biggest career builder of your life – your degree.
None of these steps – individually or even collectively – will make your student loan debt go away completely. But they can satisfy you that you are doing all you can right now to keep those debts to an absolute minimum. You won’t regret it later, like after graduation.