How to Avoid Excessive Student Debt

The majority of students will graduate college with a student loan debt of around $22,000 which becomes reality once the payments fall due six months on. The last thing you want to do is increase this overall debt burden whilst at college. Unless you have a generous benefactor who is prepared to pick up all the bills for you then the wisest thing to do is live within your student budget and not take on any further debt. That means forget the credit cards and auto loans, and live within your means.

You can get a head start on reducing your graduation debt by searching out as many grants and scholarships available and thus limit your loan requirements in the first place. Once in college you have the option to begin making repayments of interest on your student loans or deferring them, unless you have a federal subsidized loan in which case the government pay the interest for you. Students can avoid getting into excessive debt by not deferring the interest payments until graduation but actually repay them whilst in school.

If you have a mixture of federal and private loans always start by paying the interest on the private loans first as this is more costly if it accrues and is added to the principal. Interest payments can be made by working whilst in college, working in the vacations, or by earning extra cash by other means such as selling plasma.

It is important to understand that whilst college days are all about working to obtain your degree and having fun as well, it isn’t a lot of fun to graduate and suddenly face huge monthly repayments. Students who have over extended their borrowing and been unable to repay the monthly instalments have in many cases seen their student loans double or triple in size due to deferments and interest charges. No matter how tough a time you end up having financially your student loans are non dischargeable and will hound you if not addressed.

If you try to live a frugal student existence you will not be alone as most of your college contemporaries will also be living on student loans. To cut college living costs sell on your text books when they are finished with and buy your own second hand. If you share accommodation with others then set up a cooking rota to save the expense of eating fast food. Consider living at home if it is a possibility to reduce accommodation expenses.

Of course the best thing you can do to avoid excessive student debt is to have a solid plan in place to repay the principal upon graduation. There are many over subscribed state programs to repay your student loans in return for working in the public sector, so research and apply in advance if this is a course you would be interested in.

Whilst student debt is almost inevitable for most students who need to take out loans to finance college it need not get out of control if you can live within your means and start reducing the debt early whilst in college. It is a decision you will be very glad you made upon graduation.