So we’re stuck with a student loan debt of $1 trillion & growing, interest rates for federal loans are about to double if Congress doesn’t do something and private student lenders are getting out of the market.
But that doesn’t mean student loans should be avoided altogether. They do help in getting a shot at a better life, but only if you treat these loans like you would an investment.
Check the potential for profit
One of the biggest problems recent grads face is spending tens (or even hundreds) of thousands of dollars on an education that really won’t land them a solid job. Resist the urge to recklessly believe that everything will be fine if you just work hard enough on your dream career.
Learn the average pay for the job you’re looking at and take out a loan that is no more than what you would earn after working for one year in that position. This is important to remember, especially since many grads get lower-paying entry-level jobs before they can hit their ideal job.
Dig around for funding
Many colleges offer opportunities for grants, scholarships or work-study programs for deserving students. Applying for the FAFSA will typically get you better access to these opportunities, but it is still important that you learn more about these opportunities for yourself – especially since certain institutions offer more financial assistance to those that enroll in a particular course.
Get as much capital as you can
Working before going into college not only arms you with more knowledge about the career you want to get into, but also allows you to save up more money to help reduce your dependency on student loans.
Remember that savings pay interest to you while debt charges you interest. This makes earning a little extra cash right before entering college an attractive choice, especially if you are not quite ready to pick a degree that will cost you anywhere between $20,000 to $150,000.