Going off to university is a rite of passage that’ll help you prepare for a rewarding career. While it might be tempting to focus on course readings, exams, and making new friends, however, you also need to consider and plan for the costs associated with tuition, living expenses, and books.
You definitely shouldn’t allow the cost of a quality education to dissuade you from studying at the post-secondary institution of your choice. That said, you also don’t what to contend with a mountain of debt after the pomp and circumstance of graduation is over and done with.
Consider these sobering statistics:
- The class of 2016 will on average graduate with student loan debt worth $37,172 a piece, which is up from a year ago by 6%
- Around 43 million Americans owe almost $1.3 trillion in debt attributable to student loans.
There are certainly some things you can and should do now to reduce, if not altogether eliminate, the amount of student debt you accumulate and to position yourself for success early on. So here are some things that college students can do now that will pay off big later.
One of the best ways to steer clear of debt is to apply for financial aid. NerdScholar previously reported that U.S. high school graduates left $2.9 billion worth of free grant money from the federal government unclaimed during the last academic year. That’s a lot of unclaimed money that could of helped to defray the cost of getting a good post-secondary education.
Grants, scholarships, and loans offer a way for you to get the money you need to fund your college education. Grants, or money that you don’t have to repay, and scholarships, or money offered as a gift, are preferable in that they’re free. Loans are another option, though they obviously need to be repaid. Depending on your situation, you may chose a combination of these options. A good site to look at is FinAid. It provides student aid resources. But before you get ahead of yourself, be sure to fill out the FAFSA (Free Application for Student Aid) form.
The sooner you start saving, the better. As a millennial, you have the advantage of time on your side. Adding factors like time, regular saving, and compound interest to the equation can lead to a very profitable outcome down the road. Consider this example from a USA Today report: Imagine investing an initial $1,000, adding $100 monthly to this investment for four decades, and earning interest of 8% on average. In four decades, you will have saved $320,000. Meanwhile, if instead of 40 years you opt for investing for three decades, you’ll end up with only $146,000. So start early, be consistent and disciplined, and reap the benefits later.
Get a Job
Yes, essays and studying can eat up a lot of your time, but getting a job while you’re in college can pay off big later. You can use the money not only to get in the habit of saving, but also to cover your expenses and to reduce the amount of student debt you need to accumulate. The sort of work ethic, time-management skills, and determination you’ll need to balance college and employment will serve you well when you eventually head out into the workforce.
Avoid the Plastic
It can be tempting to swipe a credit card to get whatever you want, but the exorbitant double-digit interest charges can leave you owing an eye-watering amount sooner than you think. What this means is that you need to be careful about racking up high bills that leave you in debt. Live within your means and try to avoid joining the list of Americans struggling with credit card debt.
If you take the advice mentioned above to heart, you’ll be a step or two ahead of your peers after you graduate. Get student aid, start investing early, get a job, and stay away from credit cards. You’ll be glad you did!