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Minimizing Student Loan Debt

By Mary Lukow

Student loan debt has become an epidemic in our country today.  The total student loan debt weighs in at over 1.2 trillion dollars.  Students exiting college with a burdensome debt load may find that it complicates life and keeps them from making choices like buying a house or starting a family.  Many people have simply accepted that this sad fact is inevitable.  However, the truth is that students can get a solid education without going into crippling debt.  If you are planning to attend college or helping your kids choose a school, here are a few tips to keep the cost of college from ballooning out of control.

Search Out Scholarships

The high cost of college has motivated many group to offer scholarships to students.  These scholarships do not all go to kids that are super smart or extremely talented.  There is an understanding by many groups that average students need help in paying for college too.  A number of scholarships are based on a particular connection or association that students share with the gifting group.  The big issue is finding the right scholarships.  Luckily the internet has made the search easier.  For a list of places to find scholarships, check out this article in USA Today.

Don’t Fall in Love with a School

The reason for attending college is to receive the education needed to be prepared for employment and a productive life.  Yet when it comes time to make a choice about which school to attend, other factors often carry more weight.  Students may be swayed to attend a school based on their subjective feelings about the school or the location.  Allowing the decision to be made on an emotional level can lead to choosing a school that is out of the family’s price range.  This can increase the amount of debt that the student will accrue – sometimes significantly.  Focusing on the purpose of college and keeping the decision rational will help you avoid burdensome debt.  Set a limit to what you can afford and only consider schools that allow you to stay beneath that limit.

Start with a Community College

In the first two years of college, students often spend time getting general requirements out of the way.  Their coursework rarely includes classes within the field of study they have chosen.  So why not get these general courses out of the way at a lower cost?  Often students can invest two years at a community college and get these required classes finished.  At this point, the student can transfer to a university and complete more specialized classes to prepare more specifically for a chosen career.  This allows students to pay much less for those first two years and only pay the higher cost of full college tuition for two years instead of four.

Knock Out Gen Ed Requirements

What’s even better than fulfilling general requirements at a community college? Fulfilling them in high school.  You may ask whether that is even possible.  Yes, actually, it is!  Many high schools today often AP or dual-credit classes.  These classes allow students to earn college credit while attending high school.  Dual-credit classes give students credit based on a pre-arrangement between the high school and the college.  The syllabus of the class is developed to address the required elements of the corresponding college course and upon completion of the class students will receive credit from both institutions.  For AP classes, students are required to earn an acceptable score on the AP exam at the end of the course in order to receive college credit.  We encourage you to speak with the guidance counselor or other appropriate administrative persons at your local school.

Consider a Trade or Vocational School

It’s important to remember that a college education is just one of several options available to students as they graduate from high school.  If the student wants to pursue a trade, such as HVAC, plumbing, electrical, or many other types of training, then it may be in their best interest to look into a trade or vocational school.  These schools prepare the student to enter these types of jobs with training to give them a leg up, and they do this at a more economical cost than a traditional university setting.  These schools have become very popular and should not be overlooked if they fit the goals of the student.

Be Disciplined to Finish on Time

This blog has been mostly about what students and families can do prior to attending college to keep costs contained. Yet once students are in school, there is still an important action they can take – making sure they finish on time.  While typical college attendance used to span 4 years, it now often creeps to 5 or 6 years or even beyond.  Students can combat this by being disciplined and treating their coursework like a job.  Finishing on time helps to keep student loan debt from spiraling out of control.

These are all simple steps that anyone can take to keep college costs under control.  While most students will need to make some financial investment in post-secondary education, that investment need not be burdensome.  Being smart in your approach to college costs can pay you big dividends when you graduate with no debt or manageable debt that can be quickly paid off.

While Federated Bank does not provide student loans, we do provide financing options that can assist with schooling expenses.  And as your local bank, we always have your best interests in mind.  Please feel free to speak with your local Federated Bank loan officer to discuss options that best fit your student and your family.

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