The student loan juggernaut, before it became a national scandal, was a way of life for many middle-class high school students like myself. Better known as a “necessary evil,” than a reason to be embarrassed or worried.
But you can't change the past, so here is advice for students past and present — whether you're about to make the leap and want a glimpse of your future or you are still recovering from the fall.
Prep for Success
Student loans do not equal a free education, even if it seems like it at the time you sign on the dotted line. Put the math in terms you can accept: According to its 2012-2013 rates, one year at Princeton is like buying 109 iPads and paying for them for the next 30 years. Four years at Penn State is the same as buying a 1,867-year subscription to Forbes magazine. Talk about a legacy.
Many high schoolers just don't think about what student loan debt means (not to discredit those who do, of course). But there's a fine line between heading off to college because it's what will benefit you the most and just doing what all of your classmates and peers are doing.
And remember: People will actually pay you to go to school. In the very rare case, a company you work for will foot the bill in exchange for years of your service. In other circumstances, nonprofits have money they need to get off their hands. They want to give it to you. You just have to prove that you aren't a scammer and that you deserve it by responding to any and every essay scholarship you can find.
Minimizing Damage While Attending
It seems like a common phenomenon for today's college student to see attending college as a social outlet and not the investment in one's future it really is. Newsflash: College ends. Friends move out of town, and the money stops coming in unless you get a competitive job.
By all means make the most of the social aspects of college, because networking is valuable too, but don't over-network at the expense (literally) of your future financial happiness. Move off-campus and get your hands on some sub-$500 rent. Pick up an hourly job at Blockbusters (oh wait, they're closed) or a super-sketchy gas station (oh wait, I regret that) and put that money not towards the bar tab, but towards your groceries. Then cook and pre-game at home to keep restaurant and alcohol costs down.
The very last thing you should be doing is rounding up when you calculate your expenses and using the “leftovers” as padding. Student loans don't exist to make your life easier, they exist to help you get an education. Don't take advantage because even if you skimp you'll be paying for a long time.
Most importantly, major in something that will make money and leave your passions for your minor.
You can read Hemingway and ponder 1700s French philosophy on your commute home from a high-paying corporate gig. You can even save for a few years while working there and then quit to do what you want while you pay your own way. The alternative is having some really cool ideas and then trying to make it in the freelancing world right out of college. The alternative isn't that great.
Consolidating and Paying Off
Maybe all of this information comes too late. Well, never fear, the US government is here.
If you have loans spread among different banks and all of the loans are in your name, you may be eligible to consolidate those loans into one big loan (and one big payment) by visiting Direct Consolidation Loan, a government website.
You'll also have the option of choosing an Income-Based Repayment plan if you aren't making very much, or even getting your loans forgiven after a period of time for working in a public service industry (check the website for more details).
For a more in-depth look at consolidating your student loan debt, look no further than the GRS archives.
Loans can be paid, and the clutches of debt can be escaped. Use the resources here at Get Rich Slowly to manage your income — no matter how much or how little there is of it — to get out of debt. Even student loans, once considered “good debt,” are now an uncomfortable mark on your credit report… and more importantly, on your standard of living.
But make sure you're informed, not afraid, and if you regret the choices you made, you can start saving for your kids early. After all, that's the kind of legacy you want to leave.