For many, student loan debt is an unavoidable rite of passage that can leave you in a precarious financial situation in the future, if not managed properly.
Reports suggest that student loan debt is rising worldwide. Many individuals – particularly millennials – with student loan debt delay major life milestones, including saving for the future, getting married and/or buying a house, among others.
In the US, Americans are drowning in US$1.6 trillion federal student loan debt. YaleGlobal Online notes that the average student loan debt is £55,000 (US$71,280) in the UK, while students in Sweden, where tuition is free, leave with an average debt of about SEK20,000 (US$2,125).
Here are some suggestions on how to lower one’s student loan debt like the latter example:
Borrowing a higher amount than necessary for university may make life comfortable as a student. But it’s worth noting that choosing this option means you will likely be in debt longer after graduation, further delaying major financial milestones in life.
Instead, borrow wisely. Calculate how much you’ll be expected to pay back each month upon graduation to help with your decision-making. Failure to do this may find you shelling out more for your monthly student loan repayments than you would for your rent or mortgage.
Attend a cheaper university
With so many universities in the market today, you’re bound to find one that suits your budget. If you find two universities with similar academic quality and are comparably ranked, you may want to opt for the cheaper one to avoid taking on thousands of dollars more debt.
If the more expensive institution can potentially lead to careers with better career prospects, then it could be worthwhile taking on more debt.
Apply for more scholarships or financial aid
According to reports, one of the major regrets of student borrowers is not working hard enough to secure scholarships or financial aid.
So, limit the amount of money you borrow by exploring as many financial aids and scholarships available. These applications can be time-consuming, typically requiring a lot of effort on your part, be it writing essays to getting references, among others, but the effort is well worth the pain.
Ultimately, when it comes to student loans, practise good judgment and calculate your costs before signing the dotted line. If you’re lost, get advice from trusted sources to help you make the best decision.
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