So, you’ve graduated college and are now ready to enter the real world, but are you really prepared for it? Take a look at your student loans, for example. Have you already started to pay them off, or are you still hoping your parents will help you out? Chances are, with the rising cost of tuition in all areas of higher education, it’s unlikely you’ll get through you college years without accruing some serious interest on those loans.
Take a look at the staggering statistics in the Consolidated Credit infographic below. It outlines the history of student loans in the U.S., and what it ‘s come to today: 30% of student loan holders who are at 30 days passed due on their payments; 1 in 12 who’ve default on federal loans. Ouch.
These numbers are the reasons many are doubting the value of a college education, or wondering when the tuition bubble will burst. For now, though, this is the reality we are facing–and if things don’t change, it’s the reality faced by future generations as well.
Too often, college students graduate with a diploma and a mountain of debt. Although student loan debt is a fact of life for many grads, there are ways to prevent the debt from growing out of control. By understanding debt and making good financial choices, you can find a balance between creating debt that helps you earn more in the future and ruining your credit, which will be a stumbling block to renting an apartment, turning on utilities and even finding a job.
Here are some tips to mange your education and debt.
Major in a Growing Field
If you are going to go into debt in order to earn your degree, be sure that your field of study is one that will lead you to a high-paying career. If you’ve realized too late that your degree isn’t going to help you find a great job, pursuing a graduate degree in a growing field can turn things around. With WSU’s online MBA degree, you can earn a degree around your schedule.
Apply for Scholarships
There are so many different scholarships available for practically anyone, it’s almost silly not to search for ones that you would qualify for. Using various online search engines and resources from your college of choice, you should be able to search through all of the available scholarships to find ones that might be right for you. Applying sometimes takes some work, but in the end, it’s worth it.
Use Summers For Paid Internships
Before your term is over, apply for paid internships and jobs in your field of study. They typically pay better than a minimum wage summer job and you get some real-world work experience. Paid internships are in high demand, so begin applying early in the term so that you’ll have something lined up before summer. Once you start making money, don’t be tempted to spend it all on summer fun. Instead, save as much as you can so that you’ll start your next term with some cash in your pocket.
Get a Part-Time Job
Part-time jobs, especially jobs that are related to your future career, are great ways to earn money while you’re in school. For example, if you are studying finance, a part-time job with a bank or other financial institution will teach you about the job from the ground up. Building experience before earning your degree builds up your resume, making it easier to find a job after graduation. Plus, having a steady income makes it easier to save up for larger purchases, books and even nights out with friends.
Don’t Take Too Much Credit
Credit card companies are notorious for extending credit to unemployed college students. Sometimes, these credit offers come with offers of free stuff like t-shirts, Frisbee and even iPods. The details of the credit agreement are spelled out in the fine print but. most students don’t bother to read it or don’t understand what it means. Instead, they learn the hard way that missing just one payment can drastically increase a card’s interest rate and the interest rate on other cards as well. Suddenly, that $100 charge for a night of beer and pizza will take years to pay back.
Learn Money Management Skills Now
While you’re in college, you will have access to the best educational opportunities. Don’t pass up the chance to take a course in money management. Most colleges offer workshops and other programs designed to help students learn how to understand interest rates, balance a checkbook and create a budget. These courses will teach you how to make good financial choices.
What makes managing debt especially tricky for college students is that they have already accepted a great deal of debt to attend college. Their hope is that one day, once they’ve earned their degree, they’ll be earning a lot of money and have no trouble repaying their loans. While that is often the case, limiting the amount of debt helps make repayment even easier. Not all debt is good debt and even with a great career, it’s difficult to overcome bad credit.
