By Ryan Laspina
Senior Specialist, Red Flags and External Reviews at APUS
Unfortunately, living in debt is a common scenario for many people these days. It is nearly impossible to pay for large purchases like a house, car, and an education up front. For some, taking out loans is the best way to make those purchases happen. Just because you have outstanding debts does not mean you cannot attend college, as there are tips and tricks to help you successfully manage all of your debts while attending school.
Here are some of my tips for managing debt while attending school:
- Attack your smallest debts first.
For example, if you have a mortgage, car loan, pending school loans, and a credit card bill, your credit card bill will probably be the smallest of the four. Try to pay that off faster than the other loans. Allocate any extra money you may have to paying off the credit card, and once that is completely paid off you can attack the next smallest debt. This will make paying your school loans more manageable.
- Try to find alternative ways to pay for college, such as scholarships and grants.
There are many scholarships available, but they have to be found. Consult with your financial aid advisor at your school for some resources and guidance. If you are eligible for the Pell Grant, you should absolutely take advantage of it because it does not need to be paid back at a later date.
- Keep in mind that student loans have different options than other loans.
It is possible to defer payments through forbearance. It is also possible to be set up with a manageable payment plan, such as an Income-Based Repayment plan. While taking out more loans than you can handle should not be encouraged, remember that student loans are somewhat different from other loans. Also, it is hard to place a price on education, so if you are successful in college your reward should quickly outweigh the debt incurred.
- Try to consolidate similar loans into one larger loan if possible.
This works especially well for school loans. If you can consolidate your school loans into one larger loan, you will only have to make a payment to one or two servicers per month. While it will not really save you any money, it does have a psychological advantage because you will get less individual bills every month.
Living in debt is stressful, but it is also commonplace in today’s world. Most adults have some debt that they are responsible for, and there are many that have multiple debts. This does not mean that you should hold off on your educational pursuits. Fiscally responsible individuals pay off their debts, and using some of the above tips and tricks may make paying off your debts a little more manageable.