"A man in debt is so far a slave" Ralph Waldo Emerson.
The cliché on ignorance being more costly than education seemingly is true. However, education especially at the university/college level can be quite expensive.
You graduate from high school amidst the pomp and thrills. Then, your parents immediately inform you that you will be handling any expenses with education that follows after high school.
And it dawns on you that you have aspirations of becoming a medical doctor, a lawyer, an engineer, tax consultant or simply pursuing your education at the university level.
Thank heavens, you can access a student loan. You sigh with relief, at such wonderful opportunities.
Welcome to the world of debt bondage a.k.a student loans.
Student loans can be a significantly easy way to fund a higher education but they are also one of the worst types of debt to have.
Getting a student loan is not all bad. In fact, student loans are good debts that improve your financial future.
According to the US Department of education, there are significant gaps (earnings difference of about 25%) between high school leavers and college graduates.
Fortunately, with strategic planning, hard work and good resources with information; some graduates have been able to pay off their loans quickly and get returns on their investment (education).
It is not a task for the faint hearted as you will be combining school work with several tasks to meet such obligations. If you manage not to pay your student loans, and on time, several things can happen.
The interest on the loan starts to build, your credit ratings will be affected and eventually the government will start to take out of your earnings and pay it for you.
Now that we are done with the gory details let us move on to the wonderful news. You can pay that debt while you are still in college, read on.
#1. Programs and Scholarships
Apply, apply, and apply!
There are several programs that provide significant bailouts for student debts. Regardless of the year you are in college, never stop searching for scholarship and grants.
Visit your institutions financial aid department and research online for different scholarships that may offer financial aid. As long as you qualify, keep applying.
There are also programs that allow for volunteering jobs and are willing to help pay off student loans in exchange for some service work. The Peace Corp, AmeriCorps and several other non-profits help with this.
Getting scholarships and grants can also be useful in reducing and sometimes cancelling the debt bondage of student loans. There are also specific student debt relief scholarships that can help you in this regard.
#2. Start a small business or take on freelance work
Technology has evolved and changed the ways that businesses are run. And so, starting up a small business online can help rake in funds that can be channeled to paying off your student loans.
Since there is really no need for a physical space, it makes startup inexpensive. So, start with something that you are passionate about.
I would for instance start a blog and allow for some affiliate type marketing on my blog that could make money for me however little.
Blogs with adequate followers can even get you paid adverts from companies who want your followers to know about their products and services.
More than ever before, it is now much easier to set-up a website using cheap web hosting services. With this, you can then setup stores that accept PayPal. And you can also use other payment processors on your site if you so wish.
You could also take on some freelance work that will create extra streams of income. As a freelancer, you can control the amount of work you want to do and can work on varieties of services depending on your passion.
#3. Gradually start to pay your loan interest
Although, student loans are to be paid after university graduation, it wouldn't hurt to start payment on the interest.
Since the interest is normally lower than the principal, paying up the interest from the monies you earn when you freelance or set up a business will help to reduce the total amount you owe. And keep your balance to a minimum at the least.
#4. Student loan forgiveness programs and cancellation
Student loan forgiveness programs are more post college than during but they still apply.
The downside to this is that only few occupations or public service jobs are eligible for student loan forgiveness. There are also restrictions as to which kinds of loans can be forgiven. And in order to be eligible, you must have made a certain number of monthly repayments.
With some universities, they offer work study opportunities that cancel tuition fees. These opportunities give you a chance to earn money or aid in payment of your tuition and other costs.
Either or both of these avenues can be explored.
#5. Live like a student
Although the temptation to spend money on unnecessary things will arise, you need to remember that you are in college or university for a purpose.
You need to focus on the new skills and chosen career path you are in school to achieve and set your priorities right.
Instead of staying in a high rent area or apartment; opting to live with a roommate will save you money on rent.
Avoid spending money on expensive cars and electronics. Such tend to come with higher car insurance quote as well.
You can also consider these options for down payment assistance in your location. And if you must spend money on cars or electronics, you should consider using a lemon law attorney to help you in getting value for your money.
Find creative ways to have fun with friends without spending much money, stick to a budget and spend wisely. It would go a long way in allocating the little you earn to paying back your student debt.
Always remember that student loans are not free money. They will be paid back and at a premium too.
So if you can afford not to take one or at least add more to your debt obligation, please stick with that decision. It makes things easier when you start working and have to pay up any remaining debt.