3 Ways to Graduate Debt Free
Over the past ten years, the cost of a college education in America has gone up very year, resulting in a $1.2 trillion student loan debt. The average loan has doubled in the past 20 years Hillary Clinton recently announced a proposed student loan reform as part of her campaign. This “New College Compact” would make college tuition at public schools free of charge.
In the meantime, millions of young Americas are heading back to college this month, and they will have to shoulder more debt to earn their degrees. Here are three ways to graduate debt free:
Work while you are at college
The idea of working while others are having a great time at college might not seem very appealing, but take a long, hard look at the future. Working now will prevent years of struggling to get out from under the burden of your student loans. The annual fees for a public college can be as low as $5,000 and as high as $14,000 in some states. Working 20 hours a week at minimum wage, you could earn more than $7000 in a year. Add a good summer job to that number, and you could afford to go any public school you choose.
Working while you study has the added advantage of getting experience that will make your résumé all the more appealing when you graduate. Consider working in the field you plan to enter once you graduate, even if it is just as an office worker or temp. It will give you valuable insight into the everyday operation of that career.
Scholarships and Grants
The best way to make the most of the available scholarships and grants is to start the process early. Some are merit-based, and that will require hard work during your high school years. Others are based purely on financial need, but there is a limited pool of funds available so competition can be fierce. And even if you do get a scholarship, it may not pay for all your tuition and board.
Saving for College
Here too, it’s wise to start as early as possible. There are several tax-advantaged options available to families, including Section 529 plans, Coverdell Education Savings Accounts (ESAs), zero coupon municipal bonds, and Roth Individual Retirement Accounts (IRAs) . Talk to your financial advisor about the best vehicle for your family’s needs.
Perhaps Clinton’s “New College Compact” will lessen the burden for students in the future, but at this stage, it’s still just an idea. Taking action now can prevent a lifetime of crippling student loan debt.
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