An Education in Reducing College Debt

Debt Consolidation And Loans Whether they're pulling an all-nighter to finish a research paper by due date, reconciling with the roommate they're having a conflict with, or studying for midterms — college students juggle a lot. On top of managing academics and a social life, finances play a huge role in the college lifestyle — and in how much debt and credit they have upon graduating. More and more college students have to pay for their tuition on their own, or with little assistance from their parents who can't keep up with mortgage-like tuition payments. Many college students who are dependent on student loans to finance their education are finding themselves with huge debts to pay down when they graduate.

In addition to the rising cost of tuition, college students struggle to cope with miscellaneous expenses, such as books, food and social activities. Many turn to credit cards and wind up with the added burden of credit card debt — another factor that could come back to haunt them when they try to use their credit scores to secure a home mortgage or a car loan after graduation.

In 2010, the New York Times reported that college graduates owed an average of $25,250, up 5 percent from the previous year, in student loans. Another study shows that 80 percent of bankruptcy attorneys say the number of their potential clients with student loan debt have increased significantly in the past three to four years. This isn't anything groundbreaking, either.

With total student loan debt now at about $1 trillion, many students are taking alternative routes to steer clear of debt and bad credit during their college years. Take for example:

Opting for a Lower Tuition at a Community College or State University

Choosing to attend a community college or state university rather than a private institution offers many college students the ability to get an education for less. And just because a community college or state university may lack the prestige or name recognition of a private school doesn't mean its professors and facilities aren't of comparable, or in some cases, higher quality.

Many students save money by completing two years at a community college, after which they transfer their credits to a larger institution. That's an increasingly popular way for students to earn a four-year degree at a bigger school for significantly less than what they would pay if they started there as freshman. Four out of 10 high school graduates now start their college careers at community colleges in an effort to reduce the burden of debt they'll carry after earning their bachelor's degree.

Living At Home Rather Than On Campus

Another way college students are saving money and minimizing debt is by dodging on-campus housing. Living at home with their parents or in off-campus housing could result in saving a big chunk of money in room and board that on-campus college students pay each semester.

The conventional ways of paying for college are a thing of the past for many students. More and more students are using different methods to stay financially secure and avoid bad credit after graduation. If you're a college student or the parent of one, take a look at these 10 student habits for a better understanding on how the college life can damage your credit scores. Making small changes or exploring alternative approaches to curtailing the high costs of your college years can help smooth the transition from college to full adulthood. Getting a good education shouldn't come at the expense of your financial future.


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