5 Steps to Help Your Child Avoid Student Loan Debt

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You know that movie, Step Brothers, where the parents can’t seem to get their grown sons out of the nest? They even build bunk beds – as two middle-aged men. Today, that isn’t too far from the truth.

5 steps to avoid student loan debt

Okay, maybe I am being a little extreme but many young adults are moving back in with their parents according to the Pew Research Center. Pew researchers found that 32% of 18-to-34-year-olds live with their parents which is the highest rate since 1940, right after the Great Depression.

What is causing this?

Largely student loans.

And if you are excited about them moving back in, this isn’t the only impact of student loan debt. Graduates are buying homes much later, starting families later, and saving less for retirement than previous generations. According to Nerd Wallet, it is now estimated that today’s graduates won’t be able to retire until they are 75 years old, up 13 years from the current average of 62 years old.

So how can we help today’s generation reduce or eliminate student loan debt from their future before they even get sucked into it?

Here are 5 steps to help your child avoid student loan debt

  1. Weigh the options

While supporting your child to go to the “school of their dreams,” I am sure their dream doesn’t entail them being buried in debt for decades and having to retire in their 70s. Unless career opportunities will be better upon graduating from that school, it is typically not worth the extra buck. This is a serious discussion to have with children as they often don’t genuinely understand the consequences of student loan debt. I highly recommend utilizing a student debt calculator to show them what their loan payments would be. Want to take it a step further? Look up the average starting salary in the career of their choice and calculate their disposable income (after living expenses and the loan payment.) This will most likely open their eyes!

  1. Consider trade schools

When I worked in a turbine plant, we couldn’t find good welders to save our lives. Those we did find were making tens of thousands of dollars more than me, even though I had that fancy diploma. Why? Because there is a major shortage in skilled trades. Plumbers, HVAC technicians, electricians, contractors – they are all making fantastic money right now because there aren’t enough of them. If your child does not want to go to college, perhaps this is the path for them. They are highly needed fields that pay well and completely eliminate student loan debt. Down the road, they could even start their own business in the field, making well into the 6-figure mark!

  1. Apply for scholarships and other financial aid

There are billions of dollars in scholarships and financial aid out there. The problem is that many students don’t apply for it – or, if they do, they don’t know what they are doing. There are many different types including merit aid, grants, third party scholarships, work study and more.  If you want to learn more about financial aid and how to find scholarships, join this free webinar on the “6 Steps to Quickly Secure Scholarships for College.” The important thing to know is that the money is out there and that it can be used for tuition, books, fees, a laptop and more.

  1. Reduce overall costs for college

According to CollegeData.com, the average cost of college is over $24,000 per year at public schools. Believe it or not, room and board are a larger portion of this than tuition and fees! There are many ways to reduce the total cost of college, first and foremost is by cutting room and board as much as possible. From reducing living expenses, to buying used books and negotiating tuition, there are plenty of opportunities. Sure, this may cut back a little from the “college experience” but post-graduates will be grateful when they saved tens of thousands on their student loans.

  1. Utilize part-time jobs to help cover the costs (or get college paid for)

While it is near impossible to work and pay for college completely these days, students can work part-time to pay for living expenses. If possible, money for living expenses should not be borrowed. If your child can’t handle a part-time job during the semester, holiday breaks are a great time to put some extra jingle in their pocket. Also, another option is to work for a company who contributes towards their education. One example is Starbucks who offers free tuition under their College Achievement Plan. And they are not the only company who does this!

There are lots of ways to cut back on the amount your child has to borrow. While it may require some tough decisions, they will be extremely grateful when they don’t have student loans like everyone else. Believe me.

About the Author: Jocelyn Paonita is the founder of The Scholarship System, a blog and online course that helps families pay for college with scholarships and avoid student loan debt. Their students have secured over $624,300 in scholarships so far. Follow The Scholarship System on Twitter & Facebook or grab their Free Resource Guide: 3 Steps to Writing a Scholarship-Winning Essay.

 

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8 Comments

  1. Andrew@LivingRichCheaply June 6, 2017 at 1:40 pm - Reply

    I love that you included trade schools as an option. I don’t know why so many people dismiss that and assume that everyone should just go to college. It depends on the person. Both my wife and I went to state schools and the tuition is a little more affordable than private schools. I worked during the school year and in the summers too. My wife was an resident assistant so she didn’t have to pay for housing.

    • Brad Kingsley June 6, 2017 at 1:44 pm - Reply

      Thanks Andrew. That’s great you two went to state schools to save money. Both my wife and I attending small community colleges before transferring to a state school. That allowed us to get the basic class requirements taken care of at a super-low cost. It’s another great option that more people should consider.

  2. Alexis June 6, 2017 at 7:09 pm - Reply

    I don’t think enough students apply for scholarships. There are thousands of scholarships out there to choose from, and I’ve had friends that have applied for zero. There are scholarships that are SO easy to get, too!

    • Brad Kingsley June 6, 2017 at 8:14 pm - Reply

      Indeed Alexis! It can be a good bit of work sometimes but Jocelyn’s course teaches how to streamline that process so it isn’t so hard. People who don’t pursue scholarships are leaving a lot of money on the table. No reason at all not to apply for a ton of them.

  3. Laurie @thefrugalfarmer June 6, 2017 at 7:37 pm - Reply

    Awesome info here. I agree with Andrew about the trade schools too. They are practically paying people to go these days because of the lack of interest due to the focus on a typical college degree. We are using whatever means we can to help our college bound kids get their degrees without student loans.

    • Brad Kingsley June 6, 2017 at 8:16 pm - Reply

      That’s great Laurie! Starting off life WITHOUT a ton of debt is in itself a huge step forward. Your children will really appreciate you modeling good finances for them – and helping them graduate debt-free!

  4. Mustard Seed Money June 8, 2017 at 1:14 am - Reply

    One of the things that I did to avoid student loan debt was go to community college during the summer time to cut down on costs. It was usually at least half as cheap plus I didn’t have to pay for room and board since I was fortunate to live at home with my parents in the summers. It helped me graduate early and start earning some money faster 🙂

    • Brad Kingsley June 8, 2017 at 1:12 pm - Reply

      Community college is a GREAT option MSM! Thanks for stopping by and sharing some of your story.

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