When it comes to financial regrets, ask most millennials and you will get the same answer:
Student loan debt.
Oh, the dreaded student loan debt. Everyone seems to think it’s a necessity, however, it sends a lot of people into dire financial straits that they can’t get out of. According to Brice Capital research, a college graduate’s average debt can amount to $40,000. This amount could have been spent building a career, investing in a home, or starting out as a family.
The majority will still agree that education is important, but more and more people seem to be shifting opinions about expensive education. There are better ways to acquire education in order to avoid or minimize student loan debt. Below are some of the strategies to prepare, minimize or even pay off your student loans.
How to Prepare for Student Loan Debt
Invest in a degree that will even out your student loans.
Sure, passion is essential to have a fulfilling career. However, you need to understand that some degrees have a better return on investment than others. Before thinking of taking out a loan on a degree where the job market is poor, you need to assess how much you’re going to get paid for as a graduate of that degree.
For example, people who have degrees in the healthcare field have a good return on investment for their student loans because the job market is good. If they are able to shell out at least $1,000 a month from their above than average paycheck as a fresh graduate, they can pay off the loans in 4-5 years. A higher paycheck as a graduate means faster ability to pay off the student loans.
Avoid other loans as you are in the process of paying for student debt.
Another helpful strategy to avoid prolonging the payment of student debt is to stay away from other loans. It can be tempting to purchase a new car, house, or any other large expense right away as a fresh graduate, but this can be a fatal mistake if you are wanting to expedite the process of paying off the pending student debt.
If you can pay for your expenses in direct cash, by all means, do so. This is one way of setting yourself up for successfully paying your student loans. Other types of loans can wait–the more frugal you are with your expenses during this process, the easier it is to get out of debt.
Be wise in your college of choice.
Many colleges offer financial aid, grants, scholarships, and even low tuition fee rates. Do not be blinded by so-called ‘prestige’ of some universities with a hefty price tag. In the end, what matters more is your experience and skill when it comes to your career.
If you are up for it and would want to learn a special skill, you can sign up for a trade school. Trade schools offer vocational skills for a lower tuition fee and a better return on investment. There are also several resources online such as Niche that can help you pick a good college without accumulating much of the costs.
Alternatively, you can also sign up for community college. Community colleges, unlike private universities, also offer quality education for half or quarter of the price. Understand that if your goal is to avoid or minimize student debt, you have to make some wise choices about the college you will enroll in.
Sign up for grants and scholarships.
Brice Capital, a respected debt consolidation firm, suggests that you may apply for grants and scholarships in order to avoid student loans. Scholarships are offered to students with various backgrounds. For example, you may come from a low-income family, or you may have a certain GPA that meets a foundation’s requirements.
Grants and scholarships can also be specific to your personal background such as your racial descent, if you’re someone pursuing a particular degree, or if you have a medical condition and still want to continue your studies.
The possibilities of applying for scholarships and grants are endless. Aside from saving money for college expenses over the summer, you can also look for scholarships and grants within your community or even online.
Practice good financial planning.
Good financial planning means being able to budget your daily expenses, pay off recurring debt, and set aside money for savings.
Companies such as Brice Capital also help find ways to consolidate debt so that you don’t have to pay more than necessary. Alternatively, you can also practice budgeting at the start of each month by rigidly allocating expenses and having the discipline to it through.
Preparing for the future means paying off your student loans
All of the strategies mentioned above are important for financial success. Financial planning is the core of freeing yourself from debt, having enough savings, and ultimately living the life you’ve always dreamed of.