College Debt- How to Go About It?

Rachel Fields is having a tough time. She recently graduated from Simmons College in Boston. Armed with a master’s degree, Rachel started searching for a job. After quite a struggle, she finally got a job in a non-profit organization located in Boston.

Rachel was being paid $ 1,800 per month. Now, though the salary was good, it was not enough to cover the loan payments of $500 as well as the monthly expenditure for food, clothing, room rent etc. Rachel had applied for a loan of  $100,000 and was now struggling to repay back the college debt.

Many of us might have experienced a situation similar to that of Rachel. College debt is not uncommon. Education loans form a major component of a college debt. Then, there are those credit card expenditure as well as expenses related to books, food and house rent etc.

Experts state that college debt is spiralling out of control. A report published in usatoday.com states that, “In 2004, nearly 8% of graduating seniors carried student loans of $40,000 or more, according to the Project on Student Debt, a non-profit advocacy group. In 1993, even adjusted for inflation, only 1.3% of college seniors had debt that large, says Robert Shireman, director of the project. About 11% of graduates of private, non-profit colleges have loans of $40,000 or more vs. 5.5% for public colleges and universities, Shireman says.” However, there are ways in which you can avoid or at least lower the amount of college debt.

You should factor in your starting salary and accordingly go in for education loan, the major component of college debt. You can gather information about the expected pay offered to fresh graduates by using the information published by The National Association of Colleges and Employers. The thumb rule is that the payments should not exceed 10% of your expected gross income.

You can lower your college debt by following the route taken by Smith, a student at the Boston University. Smith always dreamt of pursuing his graduation degree from Boston University. However, he realized that he will to seek a higher loan amount and this was likely to increase his college debts. Smith decided to study in a lesser-known university in Boston, which was giving him big grants. He got good grades in his semester and finally managed to get into the Boston University which was now willing to offer him a greater financial aid.

Another way of reducing your college debt is by attending all the Advanced Placement classes during one’s high school years. Take the case of Jerry who was interested in taking an admission in the Massachusetts College of Professional Psychology. He decided to attend all the APs related to psychology. This helped him to save two classes during his freshman in the Boston based college of psychology.

When James, a student of University of Massachusetts Boston, noticed that his college debt was increasing by the day, he started looking for a part-time job. Experts state that you can keep your college debt under control by undertaking a part time job. You can also take a full time job during the summer break.

Most guidance counsellors also recommend the strategy adopted by Daniel, a sophomore student pursuing his graduation degree. He spent two years at a community college before transferring to a four –year institution. Thus, he was able to lower his college debt significantly.

Meg, a Boston based Liberal Arts student states that one should first try out for the top rated public colleges instead of a private institute. This will definitely put some brakes on a rising college debt. On the other hand, Ryan, a professor associated with the Boston Architectural Center states that going in for scholarships can be a good way to avoiding college debt. You can visit sites such as FastWeb, College Board, and Wiredscholar.com to find out some scholarships. In addition, you can always aim for winning a few community-based awards. Though the financial assistance lent by these awards aren’t too great, they can definitely lower your burden of college debt.

Boston based Joey decided to apply for a work-study program in order to lessen the burden of college debt. Not only did he receive a good financial assistance, he also gained invaluable experience, as he was able to get an on-campus job in his field of study.

Experts also state that enrolling for public service program at The United States Military, National Health Service Corps, and Americorps can help you get those valuable dollars, which can be used to service your college debt. According to a report that appeared in cnn.com, ‘teachers who commit to working for two years in schools serving low-income communities can get a $4,725 annual grant that can be used to pay off student loans. Programs also exist for doctors and nurses who agree to work in areas that don't have enough medical practitioners; lawyers who pursue public-service careers or work for nonprofits; medical researchers; and those who agree to join the National Guard.’

Thus, small steps can help you to gain a greater control over your college debt so that you are not overwhelmed by the amount you owe when you step out from your college.

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