Tuesday, August 11, 2009

Go To College Without Incurring Huge Debt From Loans

By Greg Royer

Before the turn of the century, most college-bound students financed their education through work and government student loans. Those going to more expensive schools would sometimes opt for other types of loans. The interesting thing about these students is that most spent many years paying off those low-interest government loans. Those who continued for masters or doctoral degrees often are still be paying on those loans.

In the middle of houses and cars and kids, they're stuck with bills from over a decade ago. Keep working, somewhere down the road it will all pay off, or so the common wisdom goes.

With the lessening of control over credit and loans, has come a preponderance of private student loans. These private companies have now flooded the airwaves and online banner space with targeted ads. While 18 year olds are considered adults in many ways, they are highly susceptible to these marketing campaigns. They are usually in a stressful and uncertain position wondering where the money for school will come from. We as parents and educators often increase this pressure. Further, finance is not a subject most high school seniors are offered.

Put them in a position where they are offered all the credit (debt) they want to go to college, and you can imagine how easily they succumb. After all, they still don't have to start paying until they're finished with their schooling.

One myth is that few college students can afford to go to school without loans of some sort. This is a myth that is perpetuated by the establishment. Some believe they need to go to schools like Harvard or Yale. This is strange when these schools charge many times the rate of their local public universities. Is a degree from Princeton really worth more than one from UCLA? If so we have a faulty system.

What kids need to know is that there are relatively few instances where the amount of money they pay for famous private colleges would be worth it. If you're looking to get a job with the most prestigious law firms in the country right out of college, you should probably consider going to a top Ivy League law school. Just don't forget about placing high in your class.

If you're considering a high level degree in business, there are many other great business schools. High level jobs aren't simply handed out to new graduates. It takes many years of work experience to rise up through the ranks. An MBA from one school will be as good as another. You need the degree, but then you need to prove your worth and develop your real value on the job.

So the first key to getting a degree without racking up huge debt is to choose your school wisely.

This is not simply a choice between private and public, or a local university versus one all the way across the country. You need to seriously consider a junior college (JC). Almost all of the courses you take in your first two years are General Electives (GE's). They're the same courses whether you pay ten thousand at a university or fifteen hundred at a JC. It is easy to take courses that transfer with full credit to the university you want to go to for the last two years.

This one simple step can virtually cut your college costs in half.

Pair this with another money saving idea and your entire future could be student debt free. This key to no debt is to get a job. That's right. Even a part time job while you go to school can allow you to save such a big chunk that you can pay your last two years with it.

I know, many of you will complain it's too hard, or that you're young and now is the time for you to be having fun. How much does that fun cost though? Is it worth 20, 30, 50,000 dollars in debt? How much fun will you have when you have to work ten hour days to pay a mortgage, an auto loan, feed your children and pay your student loans back?

Another key is to stay home. Yes, you can continue to live with your folks since you're going to the local junior college and that means no rent or room and board costs. You do the math for two years rent. While you're at it, ask your father how much it costs to feed you for two years.

If you liked that last key, carry it over to the next... Do you last two years and get your bachelor's degree online. Shop around, find a good deal, use the money you've saved up (and continue to save while you continue to work as you can do your online classes anytime,) and for two more years, save on room and board.

It may not be prestigious to still live at home with your parents when you're twenty-one, but at twenty five you'll be debt free with the same degree as others who owe tens of thousands of dollars.

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