In full disclosure let me start this post by saying I did not graduate college debt free. I didn’t learn this stuff until it was too late. The advice I’m about to give you is the advice I wish I would have been given in high school.
You don’t need to follow the herd. You’re not a sheep. Break out of the mold. A lifetime of student loan debt is not mandatory for a successful career. I want you to be fully informed so that you can make the best possible choices for your future. So here goes, 3 simple ways to graduate debt free.
Student loan debt is a real problem. It’s crazy. It’s out of control. At 18 years of age I had no business taking out tens of thousands of dollars going into debt for a private college education I really couldn’t afford. But this is happening every day to a bunch of people across the country.
Close your eyes and imagine this scenario with me (wait, you’re reading this, so don’t close your eyes… just imagine).
An 18 year old guy walks into a bank and asks for a loan, we’ll call him Jimmy.
Jimmy: Hello Mr. Banker, I’d like to borrow some money.
Banker: Alright, how much would you like to take out?
Jimmy: Hmmm…. how about $75,000?
Banker: Okay, let’s see what we can do for you. Do you have a job?
Banker: Do you have any assets?
Banker: Do you have a high credit score?
Jimmy: Maybe, what’s a credit score?
Banker: Well Jimmy, a credit score is a 3 digit number generated by a mathematical algorithm using information from your credit report. It helps us predict risk and determine the likelihood that you will be able to fulfill your credit obligations and pay back your debt.
Jimmy: Oh. Then no, no I don’t.
Banker: Okay Jimmy, let me just run some numbers here…. alright finished. Congratulations Jimmy! You’re approved.
Absurd, right? Of course you wouldn’t loan some 18 year old bum with no job, no assets, and no credit score that kind of money. But it happens every day, and it’s called student loans.
With massive amounts of students taking on massive amounts of debts each year, it’s no wonder we’re in the midst of a student loan crisis. Our nation currently has over 1 trillion dollars in outstanding student loan debt. That is a lot of money. Now combine that with the fact that the cost of college is consistently increasing way beyond normal inflation rates and hopefully you’re starting to understand the gravity of the situation.
Student loans are becoming a rather large problem.
Graduating College Debt Free
So what can we do about it? More importantly, what can you do about it? Well, let me make three simple suggestions on how you can make a stand against student loans and graduate debt free or at least with significantly less debt than most.
Where you go to college is important. A lot of people are willing to enter into a life time of debt all for the sake of going to a prestigious university. Let’s be real. You’re not rich (yet) and it’s not worth it. Go to a college you can afford.
It might not be as glamorous, but employers don’t care where you went; plus what’s more glamorous than not being broke and having to live in your parents’ basement after graduation?
Work is good. Having a job in college will not cause you flunk out. In fact, the opposite is more likely to be true. A study done in 2012 by the United States Bureau of Labor Statistics found that students who worked up to 20 hours a week got better grades than students who did not work at all.
College is not adolescence continued. It’s a new chapter in your life. The college experience is not a transition into adulthood, it is adulthood. It’s time to grow up. Working is a part of adulthood, therefore work should be a part of the college experience.
Working in college will help you with developing a consistent schedule and it will teach you incredibly important things like balance, time management, prioritization, and other real world skills.
But, in this post we are talking about graduating debt free, so let’s not forget the fact that working throughout college will significantly lower the amount of aid you will need. Just pretend that free loan money was not available to you and that working was your only option.
While you are still in high school scholarships, should be your main focus. Treat scholarship searching like a part-time time job. Spending just 10 hours a week completing scholarships could yield a whole lot more money than working at the local fast food restaurant. During summer vacation kick it up a notch. Work on scholarships 20 hours a week and that still leaves you plenty of time for volunteering, vacations, or working.
Just a quick example of how working on scholarships can easily pay more than a summer job…
A student working 20 hours a week for 10 weeks (average summer vacation) at $7.50 an hour will make approximately $1,500 over the course of the summer. (20 x 7.5 x 10 = $1,500)
A student working 20 hours a week for 10 weeks could easily complete 40 (or more) scholarship applications. If the student was awarded only 10% of those scholarships and if those scholarships were a modest $1000 each the student would make $4,000 over the summer.
This example is a very conservative example. With that amount of time the student could have easily looked up a lot of high potential scholarships and devoted a lot of effort into them. Remember, scholarships can range from $100 up to a full ride. If you spent your whole summer working on scholarships and could earn a full ride, you would be making considerably more than a part-time fast food job.
There are a lot of other unique and creative ways to avoid racking up big student loans, share your ideas below.