5 Ways to Avoid a Mountain of Student Loan Debt

I feel that the internet is littered with articles (some helpful, some not) about the latest economic crisis to hit America. While yes, I am adding to the cluster of information out there, I also hope to provide young Americans with a few useful options they can utilize to keep them from being riddled with student loan debt someday.  We’ve all probably seen the figures. As you can see in the graphic below, the total student loan debt across America is over $1.3 trillion and rising quickly.  Recent graduates of the class of 2015 have acquired the unfortunate title of “Most Indebted Graduating Class Ever.”  However, luckily for them, the class of 2016 will snatch that title away less than 3 months from now. I’ve assembled a list of 5 methods that you can explore if you don’t want to end up saddled with loads of student loans when you graduate. Enjoy!

1. Go to a Community College

There’s no shame in this people. I spent a year at a local 2-year college (Lake Superior College) before moving on to the University of Minnesota-Duluth where I got my bachelor’s degree. In just that year alone, I saved $6,000 by attending LSC rather than UMD ($11,000 at UMD vs $5,000 at LSC).  I was able to take about 30 credits at LSC that all transferred over to UMD. Most community colleges have transfer manuals that show which classes do and don’t transfer to local universities. Spending a year or two at a CC will drastically cut down on your student loan balance if you chose to take out loans for these years. I’ve never heard of a scenario where you can’t take at least SOME of your general education classes at a community college. I know that it’s not “cool” to go to a community college after high school when all your friends are heading off to some expensive 4 year university. I faced the same dilemma but guess what? Many of your friends who rushed off to an expensive 4 year school because it was the cool thing to do are now the ones with loads of debt. In addition, I found my time at LSC to be very useful. The classes were actually smaller than at UMD, all the professors were awesome and, unlike at UMD, they all spoke fluent English!  When it’s time to decide where to attend right out of high school, make your decision on logic and not emotion. Your bank account will thank you years down the road.

2. Go Somewhere YOU Can Afford

This would seem obvious. The problem is that a large majority of students today go where their loans say they can go. What do I mean by this? Well let’s say that 18 year old Timmy gets approved for $20,000 worth of loans in his first year of college. More times than not, Timmy then goes somewhere that costs $20,000 or more.  You don’t have to use everything you’re approved for. If Timmy is lucky enough to not change majors and graduate in 4 years, he’s going to have $80,000 in debt! Let’s hope he went to school for something that is actually useful and applicable in the job market. Another mistake people make is picking a private school over a public school for no reason other than they think it makes them ‘elite.’ I have a newsflash for you. Choosing a private school because you toured it and feel like going there will make you a prestigious 19 year old means only one thing: the college has really good salesmen and you’ve been swindled. I’ve spent the last 2 years in the ‘real world’ and, after talking to many people who work in the hiring process, have come to the conclusion that most companies could care less where you went to college. In my first job out of college, I worked as an analyst at a bank and I worked with several people who went to school at public universities and a few who went to school at private colleges. Guess what?! We all started off with a salary of $40,000! The guy who went to the Ivy league college made as much as the guy who went to school in the frigid north of Minnesota at a public university (Yes I’m talking about myself). Now, there are certainly legitimate reasons to attend a private college (you’re paying cash, specialized programs, scholarships, athletic programs etc) but for the majority of us, you’re going to end up spending  money on a degree that’s worth virtually the same as one from a public university. Swallow your pride on this one folks and make your choice for the right reasons.

3. Work Your Way Through College

Now before you jump down my throat and say it’s impossible let me just say that I’ve seen the statistics on how expensive college is getting. I know that tuition is rising an an unproportionate rate when compared to minimum wage. I’m not saying that it’s reasonable to expect a college student to work enough to pay for thousands in tuition, room and board, and other living expenses all while spending hours in the classroom and studying.  However, I think that it IS reasonable to work enough to pay for some tuition and/or living expenses. When I was in college, I knew a good handful of fellow students who were actually living off of their loans. Yep that’s right. Not only did they take out loans for their tuition and books, but they were paying for their rent, food, and entertainment using loans! They were literally financing their purchases of Chipotle and cases of Natty Light when they had free time that they could have used working a part time job. This is just stupid! At a minimum, get a part time job on campus that way you aren’t paying interest on that Friday night steak burrito. When I was in college, there was this notion that that in order to be a ‘normal’ student, you worked 3 months in the summer and then lived off your loans the rest of the year. Do you want to be normal? Or do you want to not have student loans when you’re 45 years old? If I were you, I’d chose the latter.

4. Join the Military

I get it. It’s not for everyone. Take a chill pill before you leave an angry comment. This is the method I chose to pay for the majority of my tuition expenses. During my year at LSC, I started looking at what it was going to cost for 3 years of school at UMD. Tuition and books were going to be almost $40,000 for 3 years! I decided to enlist in the Air National Guard and work part time in exchange for tuition reimbursement. The only downside to this was that I spent most of 2009 in Texas for training and then I missed a semester of school in 2012 due to a deployment. By the time I graduated I was 24 years old but hey, I didn’t have any student loans! Besides recently getting engaged :), joining the military was the best decision I ever made. I’ve been lucky enough to be able to travel to various countries in Europe and Asia and have made friendships that will last a lifetime. I highly recommend it to anyone who is considering it as a way to help pay for higher education.

5. Don’t Go

Yep I said it. You want to be financially successful in life? Don’t go to a 4 year college or university. It seems to be a popular thought that you NEED to get a bachelor’s degree in order to make a good living and this is simply not true. Some of my closest friends work in the trades doing electrical work and they make bank! I think the going rate for electricians in Minnesota with 4+ years of experience is around $32 per hour. This equates to roughly $65,000 per year! Presidential candidate Marco Rubio said something a month ago that there’s a shortage of welders and welders make more than philosophers. I have no clue (nor do I care) what philosophers make but there must be some truth in this statement. As America moves away from being an industrialized nation there seems to be a movement away from jobs where you literally get your hands dirty.  These jobs are some of the best paying in relation to how much school you need to obtain as most trade jobs require 1 to 2 years of specialized schooling after high school.  If you have aspirations to be making $100,000 or more per year then working in the trades probably won’t get you there unless you own the company yourself. However, nonetheless, trade jobs are very lucrative and can provide substantial benefits if you get in with the right company and union.

Let’s be clear about something.  The point of this article isn’t to belittle you if you aren’t able to graduate with zero debt. The point is to present options so that when you do graduate, your debt is manageable (if manageable debt is even a thing.) Hope you found some of the suggestions useful! Positive feedback or constructive criticism is always appreciated below. Thanks for reading!

About John 8 Articles
John is a 26 year old analyst living in the Minneapolis metropolitan area. He graduated from the University of Minnesota-Duluth with a degree in Business Administration while majoring in finance. In addition to working as an analyst, he also serves part time in the Air National Guard. John has an obsession with chicken wings and finds it extremely awkward to write about himself in the 3rd person. Positive feedback or constructive criticism is always appreciated!

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