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Planning For College The Right Way

Calling all high school juniors and seniors! If you’re planning on going to college, you might want to read what I’m writing here. It’s something that a lot of teachers won’t tell you about and if they do, it probably isn’t enough. If you have any inkling of what is going on in today’s economic environment, you know that jobs are hard to come by, consumer debt is out of control and the price of going to college is only getting more and more expensive. The question you should be asking yourself is…

How can I afford to go to college without taking out a student loan?

The whole idea of not taking out a student loan and relegating yourself to 10+ years of debt and interest isn’t even on the radar of most people. No one will talk to you about this because it isn’t in their best interest. What they don’t tell you is that colleges get kickbacks from loan companies and from the federal sources for the loans issued for higher education through their institution. They WANT you to take money out and be in debt. So, if everyone is out to get you into debt right from the gate, how can you prevent yourself from getting caught in the crossfire?

Point #1: Create an action plan.
Hopefully your parents were smart enough to set aside some cash for your college in the form of a 529 plan or something similar. (Parents: Help your kids out by setting them up to win in their educational and financial future by opening a 529 account or saving cash elsewhere.) Some of us aren’t so fortunate or rich though. If not, you’ll want to look into FREE money in the form of grants. Free money is everywhere for you to go to college, but it takes a little legwork. There’s are tons of sites that can help in this search and grants can be from federal, state or private entities.

[box type=”alert”]Find College Grants at The College Grants Database –[/box]

You should be doing your best in school to help improve your chances of obtaining a scholarship to offset some or all of your costs for college, so don’t slack off toward the end!

Point #2: Crunch The Numbers

Plan on doing a little research on the schools you’re interested in. It also helps to have a general idea of what you’d like to do. The Federal government has an interesting tool called a College Affordability and Transparency Center that helps you choose schools based on your criteria, quality of the school and tuition cost. Again, this is going to require that you start taking an active part in your financial life by crunching the numbers and seeing how much it will cost you for a 4 year education. If you already know you plan on going to grad school, factor in those extra 2 to 3 years. Remember, there are some programs out there that will allow you to do undergrad and grad degrees in 5 years instead of 6, saving you a ton of cash.

Let’s be real about something here. Your financial responsibilities start here and now. The moment you enter college, you are officially on the hook for a large amount of money if you decide to take that student loan. It is the first major financial responsibility young adults face & most of you aren’t prepared for it. Give yourselves the fundamentals that will help you navigate our crazy financial world without falling to the same fate as many adults. I suggest that you read Suze Orman’s book “The Money Book for the Young, Fabulous & Broke” to hopefully avoid the fate of many adults going out into the world without a clue.

Point #3: Even if you HAVE to take out a student loan, take only what you need.
You may get crazy offers for large loan amounts depending on yours and your family’s financial status. Remember, the more you take out, the more you have to pay back. You’re not required to take it all. And the dirty little secret about student loans is that you don’t have to pay it back over the standard 10 years. It’s to your benefit to pay it back as soon as you are able instead of paying excessive amounts of interest.

Point #4: Find a part-time job.
Nobody likes a sponge, that includes your parents, so the sooner your find yourself a part-time job the better. The less you have to dip into college savings for living expenses, the more you can put toward your tuition and other important things like books and room/board.

Point #5: Start saving.
Get yourself into the habit most Americans can’t even get themselves into: SAVING. As of this writing, the personal saving rate in the United States is below 5%, meaning we don’t even BOTHER to save and fall prey to the rampant consumerism insisting that we buy buy buy. We’ve seen what this does to people, their lives and their families.

We need to start looking at a different way to approach this. Save money, live frugally with only occasional extravagances and be debt-free. You’ll see that living this way will help you invest your hard-earned money into things that create value, like a home or practical necessities like a vehicle.

Do yourself a huge favor and take these points to heart. It may very well save you the headaches and pain of years upon years of repayment. Good luck!