It is unfortunate that each year many students graduate with mountains of education debt that takes long and is hectic to pay. This, in turn, makes it likely that the student is going to default on the debt; and once the student defaults on repayment, there are some consequences. Thankfully, you can minimize your student debt. But how do you minimize your student debt?
Save Before Enrolling In College
It is good to remember that every dollar you save for college reduces the amount of money you will have to borrow by a dollar. It follows that if you save $200 a month at a 6.8% interest for, say, ten years, at the end of the ten years you will have $34,433.
Conversely, if you were to borrow the same amount of money at a 6.8% interest, you’ll be forced to pay $396 each month for ten years- which is twice as much money. Thus, if you save money for college, you earn the interest, and on the other hand, if you borrow money for college, you pay the interest.
Enroll at a Less Expensive College
Choosing a college is not just an academic decision; it is also an economic decision. If you do your homework, you can find colleges that offer quality education but whose fees fits the family budget. It is good to remember that choosing an affordable school does not always mean you have to sacrifice on quality.
It has been discovered that enrolling in a public college is one great way that can save you very many thousands of dollars in debt by the time you are set to graduate. Also, starting off at a community college before you enroll in a four-year college is another surefire way to minimize student debt.
Give Priority to Federal Loans
Federal students are always more available, cheaper, and feature better repayment terms that the private student loans. Moreover, the interest rates on federal student loans are fixed unlike the interest rates on very many private student loans which are variable and likely to increase over the existence/life of the loan. The federal student loans have extended repayment terms and a variety of deferment options as well.
Pursue Scholarships and Grants
Some websites list scholarships and grant money that you can benefit from according to your personal successes and high school grades. Therefore, do check with all the schools you are interested in and find out if they offer any scholarship you are interested in. Community groups and local foundations can also offer scholarships and grants; therefore, check with them as well.