Saving
For College: Graduating With the Least Amount of Debt
By June most recent high school graduates know what college
they are going to, but many of them may still not know how they are going to
pay for it. We’ve heard the stats that the average debt students have upon
graduation has skyrocketed to $35,200, according to a recent Fidelity survey,
and that the costs of attending college increase 6% each year. College is still
a great investment for most students, especially with some planning ahead of time
to help keep debt to a minimum. It’s still true that those with a bachelor’s
degree will earn $1 Million more over their lifetime than those who only
complete high school.
The challenge is to graduate with as little debt as
possible. Here are three ways to help keep student debt to a minimum:
1.
Create a College Savings Plan
Just like savings for retirement,
it’s good to save early and often. There are many ways out there to help you
save, from a 529 account to Savings Bonds. Tip to find extra money to save: If
you can save an extra $300 a year ($25 a month at 5% interest, compounded
monthly for 18 years) you will have an extra $8,766.43 to put towards tuition
bills.
Haven’t created a college savings
plan yet? Pledge to Save with America Saves and you can set your savings goal
and create a plan to reach it. You can even sign up for text message tips and
reminders to help you reach your goal of saving for college.
2.
Shop
Around For Schools and Free Money
The Consumer Financial Protection
Bureau created a tool to compare the costs of different colleges. Their tool will
let you compare financial aid offers so you can see how all those numbers
impact your payments down the road.
Apply for as many scholarships as
you can. $500 here and $1,000 there can go a long way to helping pay for
college. Many students also stop looking for scholarships once they enter
college, but keep applying each year.
Live at Home – Living on campus
can cost anywhere from $7,500 to $9,000 per year. Consider living at home
during college (if you can) and you can save nearly $40,000. You can still get
a full college experience by joining clubs and being active on campus.
Get a Part-Time Job – Look for a
job on campus or a paid internship to supplement your income and pay for
expenses like food, books, and incidentals while in college. The more you can
pay upfront the less your monthly loan payments will be when you graduate.
