Are you thinking about taking out a student loan to pay for your education? In this blog post I am going to tell you why you don’t want to take out loans to pay for education and how you can pay for your education and graduate debt free.
My Experience with Student Loans
I was 18 years old when I took out my first student loan. My bank issued a student line of credit for $20k. My 18 year old brain thought this was great! Free money (not really, but I figured that it would be years before I had to pay it off so it felt pretty free!). So we signed the papers, the money appeared in my account and I began my first year of university.
My first year of university (at a private Christian University) cost just over $13k for tuition and residency. Other expenses like text books and day to day expenses burnt up the maority of that loan. So here I was, $20k in debt and not yet entering my second year of Univerisy. The only thing I could think of was to take out another loan. This time it was a national student loan. After siging a few papers I received funding for my next two years of university. By the time I had finished my third year of University I was just over $60k in debt…yikes! I had also decided to switch schools adding an additional three years of education which also meant more loans.
When I secured a job working in research at one of Canada’s top Universitys I had a 6 month grace period before I had to start paying back those loans. Six months flew by and I was suddenly faced with this massive debt that I had to repay. I was paid once a month by the University and after taxes were deducted, rent, car payments, food, utilities and the minimum on my loans were paid there was little left over (if any).
I am just one of many people that experience the never ending financial destruction that student loans possess. Sure I had a great time in school, made amazing friends, got a job…but there are alot of people that do that WITHOUT getting $60… $70… $100k into debt. Here’s how to graduate debt free…
How to Graduate debt free
The last thing you want after you have graudated is to put your hard earned money towards student debt. Here are 8 ways to help you graduate debt free.
Budget
Seems like a simple idea but you would be surprised at how many people don’t live on a budget. Knowing exactly what expenses will incur while in school will keep you on track to graduating without student debt. If you want to pay for school without a loan then living on a budget and sticking to is the first step. Dave Ramsey has a great Budget Template called Every Dollar Budget .
Plan Ahead
If you are a parent and want to plan for your children’s education after highschool then consider a Registered Education Plan. An RESP is one great way to start putting money aside each year for your child’s education so that you are prepared to send them off without loans and ultimately debt. Need some help choosing the right plan? Find more information here
Related: 8 Ways to Make Money from Home
Live at Home
Living at home is s not always possible depending on where you or your child choose to attend school. If possible, choose a school in your community and live at home to save on costly living expenses. If this isn’t possible then look into living off campus or finding room and board. Often this is cheaper than campus living costs.
Apply for Scholarships and Bursaries
There are many different scholarships and bursaries out there that are available for students who are enrolled in school. Maintaining good grades, being actively involved in your community/school are great ways to increase your chances for many of these scholarships.
Bursaries and grants are also available for student’s in financial need. These do not need to be paid back and are usually based on financial need or merit.
Work
Working while in school will help pay for school and help you graduate without student debt. Many Universities offer a work study program that you can apply for. Check out your school’s work study program and apply. You can also find part time work off campus. Consider lightening your course load so that you can study and work to pay off your education.
Skip the Private Schools
I went to a private university which cost three times the amount of a regular university. Coming out of school with that kind of debt was NOT worth it. There are so many great universities and colleges out there that do not come with the price tag that private universities do. Choose wisely!
Reltaed: How to Become Debt Free
Consider College First
If you are not sure what you want to study or perhaps you are looking to go into the trades then college is an excellent choice. Choosing a college in your home town is not only cheaper in tuition but you can live at home and work part time. You can often transfer those courses to a university later and graduate with a university degree (depending on program) often in less time.
Night School
If you are strapped for money but still want to get a start on your education then consider taking some evening courses while maintaining a full time job. You could also look into taking online courses through an acredited university. Working full time will enable you to pay for those courses (with some good budget keeping strategies!) all while getting ahead in your educational endeavours.
I hope these ideas help. The best advice that I can give you is to plan ahead, budget and to skip taking out those loans! Graduating with debt is never fun and will keep you from reaching your financial goals in the long run. Don’t be stuck paying off loans for the next 10, 20 or even 30 years!