Student loans are great when you are in college or university – they can take a financial load off your back and let you concentrate on your studies. But they can become a burden afterwards. Some people incur such huge debts that they are known to carry the debts well into their 40s and 50s. It is estimated that Canadians accumulate an average student debt of $26,600 by the time they graduate from university.
While student loans can make life easier during your post-secondary studies, keeping the amount low makes your life easier afterwards. So here are some tips on how to keep your student debt to a minimum:
- Take only what you need: Students are often offered more loans than they need and many of them take whatever comes their way. When you are young and there are so many ways to spend money, it’s easy to be tempted to take on the full amount. But before taking out any loan, try to put together a monthly student budget. Take no more than the amount you need to cover your essential expenses.
- Go to a local college or university: If your school is in your home town or city, commute to it from home. You may not be able to enjoy the independence that others experience when they move away from home, but it will save you a lot of money that you would otherwise have to pay towards room and board costs. There’s no shame in staying at home to minimize your student debt!
- Work while studying: Instead of taking out loans to pay for your food, rent and entertainment, find an off-campus job or join a work-study program. Even if the job doesn’t pay much, you will find that your loan requirement over a year is considerably less than that of your classmate who doesn’t work.
- Apply for scholarships and grants: There are many government and non-government institutions, organizations and private foundations that offer scholarships and grants to students. Many of these scholarships and grants are also open for students already in college. So keep applying every year.
- Live on a budget: Many students take out loans to go on holidays and to buy expensive gadgets. As a result, they accumulate so much debt by the time they graduate that it takes them years to pay it off. So be frugal and live on a budget – this is the best way to minimize your student debt.
Make an effort to graduate with as little debt as possible. You’ll be glad you did. When you graduate with minimal student debt, you can enjoy the financial freedom of your adult life! For more information on student debt and post-secondary education planning, click here.