How I Graduated College with Under $8K in Student Loans

These days, taking on student loan debt to pay for college is the norm. It’s not uncommon to see students graduate college with $20-30,000 in student loans for a 4 year degree program. It’s also not uncommon to see people pay only the minimums on their student loans (when they’d at least be better off refinancing student loans) and still have a balance when they are nearing retirement age.

In fact, according to the Institute for College Access & Success, 71% of students graduating from college in 2012 had student loan debt. But that’s just the beginning. The average debt level of graduating seniors with student loans was $29,400.

Folks, I know those stats on student loans are a couple years behind, but the reason I used 2012 data is because that is the year I graduated from college.

When I graduated college, I was one of the lucky ones in my degree program that already had a full-time job lined up. The majority of my friends in my major were planning on either taking whatever job they could find while they continued to look for a “real” job, or they decided to go to grad school (mostly because they didn’t find a job).

Out of my group of friends, I also had the lowest amount of debt from student loans when we graduated. My balance was only about $7,500 (until the interest capitalized, putting the balance closer to $8k). Here’s how I managed to get away with so little student loan debt and avoid having too many student loans.

School Selection

Choosing the right college is so important. You need to make sure it’s a school you feel comfortable at, one that offers your intended major, and you should also look at the price-tag of what it will cost you to attend.

A lot of us millennials grew up with our parents telling us we could go to any school we wanted, no matter the cost. While that’s great in theory, in practice it’s not always the best financial decision. I’d argue that I got just as good an education, or better, at my in-state public university as a lot of students get at much more expensive institutions. Why? The majority of what you get out of college depends on what you put into it. I don’t mean how much money you put into it, it’s about how much effort you put in. After all, no one is making you get out of bed and go to your early morning classes, no one but yourself that is.

Motivation and Determination

While I’m talking about effort, I was unique in that I started my “freshman” year of college with a whole year’s worth of college credit under my belt. I was motivated during high school and I knew where I wanted to go to college, so I took advantage of my community college by taking general education classes there for dual credit at my high school. This decision saved me time and money. I was able to finish my 4 year degree program in only 3 years, which saved me a year’s worth of tuition and living expenses, and extra student loans.

Motivation and determination also lead to me to work my way through school. This was nothing new, I had also worked hard prior to college so went in to my first year with a decent-sized savings fund thanks to my high school job. I got a good job with a government agency and I worked about 30 hours each week during the school terms. They were kind enough to let me work full time during summer and Christmas break. This job, along with my savings account, helped me pay for my living expenses all the way through college. It also goes without saying that I wouldn’t have gotten nearly as much financial aid, in the form of merit scholarships to cover my tuition, if it weren’t for my motivation and determination in high school.

Family Support to Help Avoid Student Loans

I’m a very lucky girl, and yes the odds are stacked in my favor. I came from a middle class family. My parents are both hard workers with good jobs, and they earn decent money. But the odds are not everything they are cracked up to be either. My parents did decide to help cover the remainder of my tuition costs (after scholarships, etc.) for the first 2 years of my college education. I did not expect them to do this. It was a very generous offer and I still appreciate it to this day. The third/final year of my college education was on me and that’s when I finally had to take out my first student loan.

I do not regret taking out the student loan to finish my degree, and I do not blame my parents for not helping me pay for my last year of college. They were very generous to help me pay for the first 2 years to begin with.

There are still financial things I could’ve done better during college. I spent too much money on groceries and going out to eat (nothing new there). I bought too many clothes (nothing new there either). Plus I never once sat down and made a budget. But overall, I’m really happy to say that I graduated with such a small amount of student loans thanks to my efforts.

What other tips do you have for keeping student loans to a minimum?

Photo courtesy of: Carlos