As you can tell from the title of my blog, I have quite a bit of student debt. I recently read an article on how to avoid student debt by Squawkfox, and it made me wonder if I could have avoided student debt had I followed her advice throughout school. I’ve decided to evaluate my past decisions based on her guidelines to determine whether or not I could have made it out of college debt free.
1. Go to an affordable school (or one close to home)
This is generally an issue of public vs. private universities and/or in-state vs. out-of-state tuition. The latter is more expensive in both cases. However, if you go to a private university, in-state or out-of-state doesn’t matter, because everyone is charged the same (more) expensive tuition compared to a public university.
For undergrad, I went to a private university, and for grad school, I attended a public university in my state of residence. The cost of tuition for one year at the private university was enough to cover four years of in-state tuition at the public university I attended. From a financial perspective, I would have a lot less debt had I gone to an in-state college for undergrad as well. However, I still feel like what I experienced by going to the private university was worth the extra cost.
2. Get a scholarship
I was fortunate enough to get a few scholarships throughout my undergrad years. While they would have covered most of the costs at an in-state public school, they barely made a dent at the private university I attended. The scholarships went straight into tuition and fees, so I never actually saw a penny of them. They did save me and my parents around twenty thousand dollars over the course of my undergraduate years though.
You can find scholarships for almost anything – academics, sports, music, etc. Ask friends and family if they know of any scholarships that you might be eligible to apply for. For example, my mom’s employer had a scholarship fund solely for children of their employees. Since the group I was competing against for the scholarship was so small, I got the scholarship every year that I applied.
3. Live at home
This definitely would have saved me some big bucks if it had been feasible to do, but it wasn’t. I also feel that living at home takes away a lot of the experience of going to college. For most people, it’s their first time away from home, which is only possible if you actually leave your home. From a financial point of view though, living at home is the way to go.
4. Buy used textbooks
I learned my lesson with textbooks after my first year of college. Do everything possible to avoid buying new textbooks that you’ll probably never use again the rest of your life – buy used, borrow, share, go to the library, etc. I recommend buying online or from other students, because you can get a better price than you’d get at most bookstores. The same goes for selling your textbooks after you’re done with them.
Another thing I learned to do was talk to people who had taken the course before and ask them if all of the recommended books were necessary for the course. Sometimes professors list recommended readings that they never get around to covering in class.
5. Do co-operative education
My undergraduate school did offer a co-op program, but there were a couple of reasons I chose not to participate in it. It would have taken me longer to graduate had I participated in the program, and I wasn’t sure that I wanted to go into the field that I was majoring in at the time. If you already know what you’re interested in, then I think a co-op is a great opportunity to get real world experience, school credit, and a nice paycheck.
I finally figured out what I wanted to do in grad school, and I’ve participated in a couple of internships (a college student’s best friend). They’ve been great opportunities to learn about a particular career, and they even paid pretty well.
6. Get a part-time job
I’ve held a part-time job throughout most of my college years, but I was lazy and took some time off during grad school. Not surprisingly, most of my student debt is from that period of time when I could have been working to reduce my student debt.
In my opinion, the ideal part-time job for a college student is some place on-campus. You’d be surprised at the variety of jobs you can find on a college campus – web design, archivist, cafeteria worker, etc. The benefit of working for your school is that your boss will probably be more flexible and understanding with your work schedule compared to a boss at a place like a restaurant or a retail store. This will make it easier for you to balance school and work.
Conclusion
After evaluating my past decisions based on Squawkfox’s tips for avoiding student debt, I think that it would have been possible for me to completely avoid student debt, but not without some major trade offs. To graduate debt free, it would have meant living at home and attending an in-state public university. These are two things that make sense financially but contain hidden “costs” that should be taken into account. For example, if I had stayed in-state, I would have missed out on living in a new city, experiencing a different culture, not having parents around, and meeting a wider variety of people from all over the world. These are some of the intangibles that are hard to convert into dollar amounts.
In conclusion, could I have avoided student debt? Yes. I definitely think I could have graduated debt free. Do I regret the path I chose? Absolutely not.
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I think it’s cool how you have evaluated your own debt experience with my own. Thank you for considering my points in depth. Hopefully, prospective students will find this story and be able to avoid student debt.
I agree there can be huge trade offs with going to school close to home and living at home. It really depends on your program of study and the lifestyle you wish to live while studying. Albeit, if one studies a mainstream subject (English, History, etc.) it is easier to avoid a debt scenario.
Thanks, fox. I definitely agree that the trade offs really depend on what each individual expects to get out of the college experience. Some people, like me, really want to get away from home, while others prefer to stay closer to home.
And the major you choose does make a difference too. If I had gone to an art school for grad school, this blog would probably be called “Really Broke Grad Student – Adventures in paying back $80,000 in student loans”.
The internet is one of the best places for you to find many interesting debt free programs like a debt calculator. With programs like this you can map the way your life is progressing with regards to financial matters.
You did the right things, IMHO. If you’re a bright student with excellent grades, you should try to get into a private school. I know whereof I speak: I work as an administrator for and over ten years taught at a huge public learning factory. Private schools have a number of advantages, not the least of which is the contacts you make that will serve you well (and that you will serve in return) for the rest of your life. Whether a very smart student gets a better education in a private college is questionable–truth to tell, motivated students learn no matter where they are. In my observation, the social experience is what can’t be matched by any but the best public universities.
That said, if you live in a state where the public universities leave much to be desired (such as, oh, say education), you may find it worthwhile to attend community college for two years and then transfer to a university. Employers see only the school where you graduated — your resume does not list every college you attended. A friend’s daughter did exceptionally well by attending a two-year school here and living at home during that time, and then transferring to Texas A&M. She not only got some wonderful scholarship aid there, she walked into an incredibly high-paying job the minute she graduated. Kid makes more than her parents combined.
Broke,
It is one of those hindsight is twenty-twenty. What I do think you did learn is sometimes there are many ways of doing a particular thing some cost more long term, and some gain us more income long term. I have a high school senior, he had a scholarship to an out of state tech school until I looked at the fine print. He would have been in serious debt and not qualified for any low interest loans. He found a small 4 yr college that he would have gone to anyway after tech school. He can always go to a tech school later closer to home.
Re grad school, I had a GA my first year, and that helped with cash flow and career building; it was an in state university and the department for my program was in the top 5 nationally; parents paid my first semester tuition because I graduated with my BA a semester early; the second year, the U had a hiring freeze but I got a residential job that made survival possible. So I debt financed my MA but that was in 1987-89 when costs were a lot cheaper. Now one grad class is about what I paid for a year of grad school. (But I have tuition remission now, so I only pay books.)
Dave Ramsey would have had me work and save up the money first, BUT I wouldn’t have been able to get a decent job (tried!!!), and it would have delayed my entrance into my chosen profession, and it would have delayed my achievement of higher rank and earnings. The higher income is far more than the measly loans I took out twenty years ago.
I think education makes a far more powerful earnings difference for women–there are no high-paying jobs for uneducated women, whereas there’s lots of high-paying labor jobs for men. What matters for women is getting your education and training as soon as possible, to set you up for a career of better earnings.
kentuckyliz: You make an interesting point about women furthering their education earlier. I’ve seen too many women pass on higher education for various reasons (marriage, children, travel etc.) earlier in life. It becomes far more challenging for these gals to get better paying jobs later in life.
Broke Grad: You’ve mustered WAY more comments on this post than I did with my initial guidelines. Sneaky. It must be all that higher education.
squawkfox: Haha…I’d call it a combination of luck and having a great set of initial guidelines to write about.
I’ve been thinking about this topic a lot as I get ready to graduate from college myself. While I didn’t do a coop, I did do two internships. I also worked anywhere from 1 to 3 jobs during college. The two things I could have done better with was finding scholarships and finding cheaper textbooks.
I think the best thing I could have done to reduce costs though, was to not work. If I hadn’t been working, I could have concentrated more on school, and taken more classes per semester. More classes each semester = fewer semesters needed to graduate = less tuition paid. The amount I made working at low paying part time jobs that were willing to work with my school schedule pales in comparison to one less semester of tuition.
All of this trading certain life experiences for additional student debt is a noble and worth argument.
BUT, I want you to come sit in my office as I try to explain why student debt is non-dischargeable in bankruptcy and that those $500-$600 per month payments will last for the next 20 years. All the way through the “cute little sports car”…”I need new furniture”….and, “Will I ever be able to buy a house” phases of life.
After bankrupting $20K of credit card debt….guess what?? Those student loans are still there.
So, that is the side of student loans that I see… and I see way too many of them each week.
These 2 posts (Squakhawk and Broke Grad) certainly generated a lot of thoughtful discussion…. Great to see! I’d like to add 1 more tip: WATCH your monthly expenses for the little things. That’s what really adds up. ie — Buying coffee at Tim Horton’s instead of making your own; buying a sandwich for $3 instead of making your own for a couple cents; dinners out; new clothes now and then; trips to the movie theatre; booze/taxis to clubs … If I’d have cut down on these things, I could have graduated with much less debt. Actually, I don’t consider myself to be very wasteful, but I remember what OTHER undergrads spent on a daily basis, and it’s pretty scarry. Be stingy for all 4 years and you’ll thank yourself.
Another point: I find people put too much emphasis on moving away to a new city, living up their 4 years in university, partying etc. I find many undergrads assume university will be the only place they’ll be able to enjoy their youth; after that, they think, life will be dull and uninteresting, so you better move away for college and assert your independence now because the fun all ends when you get your diploma. I disagree.
Consider this: you’ll still be young when you graduate. You’ll be in your early 20s. You’ll still want to party, buy nice clothes, maybe travel the world, perhaps get a graduate degree, buy a house, maybe even (shocker!) spend $ on a pretty wedding if you find that special someone. I don’t think you can justify spending $ on ANY of these things until you attack your undergrad debt. I know people in their 40s still paying off student loans, and tuition used to be WAY cheaper 20 years ago in Canada. I also have friends who turned down a low-paying but fun job in their chosen field, and took a boring but decent-paying government job instead. It’s heartbreaking to see. Don’t let 4 years of your youth put a damper on the rest of your life!
I definitely think so. Getting the generic courses out of the way at a community college would save you loads of dough. Then afterwards you can go to a state university and finish off a few of the key courses at the “high end” college. To be honest there are only a few of the courses that are really worth that much. A handfull at best especially considering the difference in the offerings.