According to The Institute for College Access and Success, nearly 65% of college students graduated with an average of $29,200 in student loan debt in 2018. While that may sound bleak, there is still something students and their families can do to ease the burden or apprehension of debt. Know what type of loan you're committing to!
Saving for CollegeFirst off, the Average Joe can start saving now. Even if you only manage to save a few hundred dollars before school starts, a dollar saved is a dollar less that students will have to borrow. Parents of college-bound students can open a 529 savings plan. This type of savings account offers tax and financial aid benefits, making it the safest way to save money for college. However, there is one caveat: The 529 savings plan should be in the parents’ names – not the student’s. When it comes time to fill out the FAFSA (Free Application for Federal Student Aid), a student’s assets are scrutinized more heavily than parent assets. So a 529 could count against a student, whereas that wouldn’t be the case if it’s counted as a parent asset. Check out FinAid for a plethora of savings strategies for students who are saving in advance as well as those doing so at the last minute.
Search for ScholarshipsSecond, keep up the scholarship search. It doesn’t end when you get your high school diploma. Students in college and graduate school can continue the scholarship search through their last year of college. And remember that the more scholarships you apply to, the better your chances of actually winning. Fastweb makes it easy to search for scholarships. If you’re not a member already, you simply need to answer a few questions in order to create a free profile. Once you have finished registration, you’ll see a list of scholarships for which you actually qualify. To get a better, more accurate list, you can fill out your profile in greater detail so that we can scour our database and find any and every scholarship that you could apply for and potentially win. Finally, keep coming back to Fastweb. Our database is updated frequently, meaning that each time you log on you’ll find more scholarship opportunities just for you.
Find a Part-Time JobGet a job – and that’s meant in the nicest way possible. Whether you find a job on- or off-campus, you can use your earnings to offset your tuition bill. Though on-campus jobs are typically reserved for students who qualify for work study, there is a chance you can still snag one of these opportunities. They usually pay minimum wage and have a limited number of work hours each week to accommodate study and extracurricular activity time. At the same time, if you have to get a job off-campus, most employers in a college town will understand your student schedule and attempt to work with it. Consider getting a job over summer break as well. This is an opportunity to work a full-time schedule, and save money for the upcoming school year. Your salary from a part-time or seasonal job can help to pay for textbooks or cover student costs, like late-night pizza and trips with friends.
Apply for Financial AidStudents that hope to qualify for financial aid must fill out the FAFSA every year. This form becomes available to students on October 1. Though the FAFSA has an 18-month application cycle, meaning it’s not due until June 30, 2021, students should work to fill out the form as soon as possible. The reason for this is that the FAFSA isn’t just used by the federal government to determine financial aid. It’s also used by states and colleges. They have their own deadlines for determining how much financial aid to distribute to students, and they usually do so on a first-come, first-serve basis. So follow their timelines in order to maximize your eligibility. Financial aid can come in the form of grants, scholarships and work study. However, it can also come in the form of student loans.
If You Have to Borrow Student Loans, Be Smart About ItIf you do have to pay for college with student loans like most of the other Average Joe's out there, here are a few tips for navigating the borrowing process: • Fill out the FAFSA. This is the only way that you will qualify for federal student loans, which have the lowest interest rates as well as loan consolidation, repayment options and loan forgiveness.
• Don’t over-borrow to pay for frivolous things like late night pizza, spring break trips and new clothes for every occasion.
• Try to pay interest – or save the interest – while you’re in college. Accumulating interest can cost hundreds of dollars over the lifetime of the loan. By paying it down while you’re in school or saving that money to pay down later, that’s less money that you’ll have to pay with your hard-earned income after graduation.
• Check out loan forgiveness programs. These are unique opportunities for graduates who perform a public service like serving in the military, teaching in an underserved area or volunteering with AmeriCorps or PeaceCorps. After ten years of service, any remaining student loan debt will be discharged.
When you’re making decisions on how much to take out in student loans, look farther into the future. A great rule of thumb is that you shouldn’t borrow more than your expected annual salary after graduation. According to the Society for Human Resource Management, the average starting salary for a recent college graduate is around $51,000. If you’re undecided on your career path, use that figure as a guiding point. If, however, you have a very specific career path in mind, check out starting salaries for your current location as well as cities you’d like to live. That will give you a more accurate idea as there are also many starting salaries that are well below $51,000. Need extra ways to pay for school? Fastweb's Financial Aid page can help you find additional ways to pay for college. Just because you might be paying for college like the Average Joe doesn’t mean you have to settle for an overwhelming amount of student loan debt. It will take a lot of hard work, motivation and saving; but in the end, it’s worth it…literally.