Five Simple Steps to Avoid a Mountain of Student Loan Debt

This is a guest post and does not necessary reflect the views and opinions of Academy Success (but I agree it’s pretty good advice). Learn about guest posting on Academy Success here.

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College is expensive …

It’s an obvious statement and somewhat of a cliché in 2013, but it can’t be ignored by high school seniors. Unless you’re in the minority of full-ride scholarships or parents who pay tuition, you need to find a way to cover the cost on your own. In the U.S., that way is the almighty student loan and you can get caught under a mountain of student loan debt if you’re not careful.

Scholarships aren’t generally interesting to students until after they see how much they will be paying back in student loans. So get on that band-wagon sooner rather than later. For example, if you are preparing to go to med school, you will need to take the MCAT. The higher you score on this test the more likely you are to receive scholarships to help put you through school.” between “Keeping free of credit cards won’t shrink your student loan bill, but it will make the payments easier when you don’t have other burdening debts to deal with.” and “College students are also vulnerable to identity theft.

There’s roughly between $902 billion and $1 trillion dollars in outstanding student loans in the U.S. To put that in perspective, that’s more than all outstanding credit debt in the nation. The statistics were verified and compiled in a report by the American Student Assistance (ASA) researchers.

That outstanding debt can be a burden to many recent grads who are underemployed or even unemployed. More than 5 million borrowers in the U.S. have at least one overdue student loan payment, the ASA also reported.

The good news, especially if you’re a high school student or parent of a student without a secondary education, is that there are some very basic measures that can be taken to extremely reduce debt, stress, and hassle from student loans to maximize the most potential from each dollar borrowed.

Consider State Colleges

Taking room and board into consideration, a single year at a private, nonprofit 4-year college could cost almost $35,000 per year, US News & World Report reported. Compare that to around $19,000 for a public 4-year college and you’ve nearly cut cost in half simply by going the public route.

The good news: you’re likely not skimping on quality of education either. In a 2013 preview published by US News, 6 of the top 10 undergrad business programs in the nation come from public universities.

Form Good Financial Habits

And form them early. Credit companies target college students for one reason: they’re likely to accumulate debt and pay only the minimum monthly payment for a very long time. Keeping free of credit cards won’t shrink your student loan bill, but it will make the payments easier when you don’t have other burdening debts to deal with.

College students are also vulnerable to identity theft. A report by the U.S. Department of Education shows an alarming number of colleges still use students’ Social Security numbers when posting grades, making it easier for criminals to obtain the data they’re looking for. Students who arm themselves with the facts about identity theft are less likely to fall victim to an incident.

Protect yourself from shoulder surfing and identity theft by always using situational awareness as your best defense. Knowing who is around you and what they’re doing usually triggers the right response to protect yourself.

Go Into Public Service

In 2007, Congress passed the ‘Public Service Loan Forgiveness Program’ to encourage students to take up public service after graduation. The advantage is that borrowers can be forgiven of student loan debt after 120 payments (about 10 years), as long as they’re consistently employed full-time in a public service career.

Public service jobs include anything from a public school teacher to law enforcement.

Repay Based on Your Income

If public service isn’t for you, there’s still options to make your student loan payments less burdensome. The same law passed by Congress in 2007, gives a student the ability to lower payments based on the amount of income. This won’t necessarily get loans paid off any faster, but it’s a great option to keep in mind if your career is slower to build wealth over time.

Pay Them Off Early

Income is scarce after college, but the quicker you pay off your loans, the quicker you can begin using your money for the things you want in life. Making the minimum payment to pay off your loans can sometimes take up to 30 years!

Do your future self a favor and set up double or even triple payments to pay down your debt quickly. Also big chunks of money like some of your graduation money or your tax return to make large payments. You’ll pay off your debt much quicker, avoid of the excess interest, and can being using your money for the things you want in life.