The Project on Student Debt at The Institute for College Access & Success just released a report indicating that, for the fifth year in a row, the average amount borrowed by college students has increased. The average debt for undergrad students in 2012 was $29,400.
Even if you consider the fact that some of that comes from for-profit colleges, all you have to do is look at the rising tuition rates of your local not-for-profit school to see that it’s a growing trend. College is getting more expensive, and more people need to borrow in order to afford the price tag.
I have student loans for my undergraduate and graduate experiences, but I’m fortunate to have a very low interest rate. Today’s students don’t even have that luxury.
So before you borrow for college, here are three things to consider:
1. Do you even need to go to college?
It used to be that college was a rite of passage for those who wanted professional jobs. It was even acceptable for those who didn’t know what they wanted. Just go to college, and it will sort itself out. Get any degree, and you can have a good-paying job when you finish.
That’s not the case now. The job market is still tough, and many people with four-year degrees are working jobs that don’t pay the bills — much less allow them to make student loan payments.
Before you assume that a four-year degree is necessary, consider some of the careers that provide a decent (or even good) living without the four-year degree. You might have to borrow to get your associate’s degree or some other certification, but it likely won’t be nearly as much as it would be for a “traditional” four-year degree.
Really think about what you want to do, and then reconsider whether you need a college degree to meet your goals.
2. Can you work to reduce what you borrow?
My big mistake with student loans was accepting the full amount every single semester. There was no need to, since I had a scholarship, but I did it anyway. Now that school costs more, such a thing would’ve been unthinkable for me.
Figure out if there is a way to reduce the amount you need to borrow. If you get excellent grades in high-school, you could get a scholarship that would offset some costs. Alternatively, you could consider applying for a grant.
You can also get a part-time job to help you reduce the need for borrowing. Working on campus is a great solution. I was a resident adviser for two years, which meant free housing. Things like that can reduce your need for financial aid (and the amount of debt you’ll incur).
3. Are there other arrangements you can make?
Sure, it would be fun to move away from mom and dad and live on a campus 500 miles away. But is it practical? Is it worth the extra cost? If you can get in-state tuition and live at home, your student loan total will be much smaller in the long run.
What other considerations would you make before borrowing for school?