Avoiding the Student Loan Trap
You should be aware of the student loan debt trap.
It’s a major problem affecting millions of Americans. Student loan debt now amounts to $1.6 trillion in total and is now bigger than credit card debt. It’s important that you avoid this kind of debt. Here are some ideas that you can use to do that.
What Is Student Debt?
Before we learn how to avoid student debt, it’s useful to know a few basic things about it.
Student debt is money that was borrowed to pay for the cost of a college education. The rising cost of college tuition and other expenses is making it harder for students to pay their way through college. The average cost of a college education is now $26,500 per year at a public college and $53,980 per year at a private college.
On paper, the idea for student debt makes sense. With the loans, students will have the ability to pay for an advanced degree that would have been beyond their capacity to pay. Once they start earning through jobs they can get because of their education, then they can start paying.
Unfortunately, that is not how it works in real life.
Students end up owing a large amount after they graduate and they are unable to find high-paying jobs. The interests accumulate and they end up owing a lot of money which they can never hope to pay in full.
For workers in the public sector, their student loan can be forgiven. For most borrowers, however, it will hound them for the rest of their lives. This is why student loan forgiveness is such an important topic right now.
Avoiding the Student Loan Trap
If you’re a young person, you should avoid falling into the student debt trap at all costs. The average student loan for a member of the Class of 2018 was $29,200. You don’t want that kind of burden when you are just starting out your career.
But that’s easier said than done. How can you avoid taking out a student loan when college is so expensive and there is no other way to pay for it.
The answer is another question that you have to ask yourself: Is it necessary that you go to college?
Around 36% of college graduates with student debt say that it’s not worth it. Sure, going to college might be fun and you can learn a lot but will it let you get a good job afterwards? That would depend on what you are planning on studying.
Some careers require a college education. If you want to become a scientist, an engineer, a doctor, a lawyer, a nurse, a teacher, or any other profession that requires scientific or academic training then a college education is necessary. For other courses, you might want to think twice before taking out a loan to allow you to enroll.
You have other options too like:
- Qualifying for a scholarship
- Going to a community college
- Tuition assistance from employers
- Online universities
Finally, you should consider learning a trade by going to a trade school instead of pursuing a college education. There is a high demand for skilled workers and the pay is good.
Those are just some of the things that you can do to avoid the student loan debt trap. Don’t start your career with a heavy burden holding you back.