how to avoid massive student debt - Student Tax OPtion

How to avoid massive student debt

Student debt can be a major setback faced by young people starting out in their careers, with the average amount of student loans currently mounting up to over $33,000. Fortunately, it is possible to avoid the accumulation of excessive debt during the college years. Read on to learn more about several options prospective students may want to take into consideration.

When facing the decision of which college to apply to, many young people find the prospect of incurring student debt daunting, and with good reason. As they observe the example of others – their older siblings, for instance – they are reluctant to end their four years of college with a huge loan they may have great difficulty paying off afterward. So what alternatives do they have?

  1. A public, in-state four-year college

There’s just no way around it: a public, in-state four-year college is overwhelmingly less expensive than its private counterpart. How less expensive? On average, the tuition and fees total in public colleges are 72% lower than in private ones. Factoring in room and board, a student that opts for a public, in-state college will save nearly $110,000 over four years compared to a student in a private, out-of-state college.

  1. An associate’s degree from a public community college

An associate’s degree is nothing to scoff at: as a matter of fact, it can open the door to many well-paying jobs, for example in the various branches of medical technology, with a median annual salary climbing up close to $70,000.

Students who are still interested in a bachelor’s degree can attend a public community college for two years and then transfer to complete the remaining two years of their degree in a public, in-state college.

  1. Trade school

Trade school is another seemingly non-glamorous option that can offer excellent salaries to professionals who do well in their chosen field. While the overwhelming majority of college graduates find their road to financial stability impeded by the loans they took during their years as students, graduates of accredited vocational schools finish their training with little to no debt and go on to earn good wages at a variety of professions such as dental hygiene, welding, aviation maintenance, and more.

  1. Apprenticeships

Large companies with plenty of on-demand jobs often have spearhead apprenticeship programs tailored specifically to fill these positions. High school graduates or students with a GED may be able to take on roles such as “application developer apprentice,” “talent acquisition apprentice,” or a variety of manufacturing jobs that require hands-on training.

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Gifted young people may find opportunities to acquire a professional niche within a large, established company, gaining valuable job experience.

  1. Early college high school

High school students who have a vision and are willing to work hard may enroll in programs that offer them a chance to gain an associate’s degree by the time they graduate. Students graduating from P-TECH school, for instance, have the opportunity to graduate, in six years’ time, with an associate degree in engineering, computers, applied science, and more, gaining headway to a well-paying career.

  1. Enlisting

While it is not an option to be taken lightly or solely on the base of financial consideration, enlisting does offer multiple benefits, such as loan deferment and tuition assistance.

How to pay for your education: strategies for doing it smart

With some planning, paying for college does not have to turn into an unpredictable, massive tide of student loans. Implementing the following four steps will help in financing college in a controlled and strategic way.

  1. Discuss options as a family.

It helps to have a clear picture of exactly how much the prospective student’s parents or guardians can contribute towards financing college. Is there a savings program set aside for that purpose? How much can the parents take away from their monthly income in order to pay for the young person’s education? Inquire about interest-free payment plans in the college you are interested in. College financial aid advisors can help make the process of decision-making streamlined and clear.

  1. Apply for financial aid on time.

Take note of the financial aid application deadlines in the college or colleges you are interested in, and make sure you have enough time to fill in all the necessary forms. FAFSA, the Free Application for Federal Student Aid, opens Oct. 1 the year before the prospective student is due to enroll. Be sure not to miss your state’s deadline.

  1. Research private grants and scholarships.

Search online for private grants and scholarships you may be eligible for. There are programs aimed at creating opportunities for disadvantaged groups such as women and ethnic minorities, as well as scholarships for certain areas of study.

  1. Look into loan options.

Loans are not always something to avoid. With the right strategy, they can enable the young person to have the career of their dreams without impairing their financial future. There are options such as a Parent Loan for Undergraduate Students (a PLUS loan) for parents and private loans for students.

Be very careful with loans, however. Make sure you don’t fall prey to loan scammers and don’t overlook inquiring about what happens if you become disabled or fail to find employment upon graduation. If in doubt, it is best to seek the services of a reputable loan consultant.

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