A University education can be a very expensive endeavor. The growing debt levels of recent graduates attest to this fact. According to a recent study, two-thirds of 2011 grads have student loans to repay, averaging $26,600. That’s a pretty staggering amount, especially when you consider prospective job opportunities available to them when they graduate.
Just because a university education is expensive doesn’t mean you have to accumulate a mountain of debt.
I did 4 years of undergrad, took a year off to teach ESL in South Korea, then did a 1 year master’s. Not only did I not borrow a dime, but I was at least $30,000 richer by the time I graduated with a B.A and an M.A in philosophy than when I started out ($20,000 of which was from teaching ESL – which is something I recommend for anyone who doesn’t know what to do with their degree and likes to travel).
Here are some tricks and tips to avoid the education debt-trap:
1) Only attend university after carefully considering other options. I’m not trying to discourage anyone from attending university who has the drive and the passion to pursuit a particular subject area, but too many students are going to university with no idea why or with no clue what they will do once they get their degree. I was one of them, and I am one of the fortunate ones who ended up with a secure job that pays reasonably well. I know many others who were not so lucky and are still trying to ‘make it’ in a job market that is over saturated with recent graduates with arts and social science degrees and little practical experience doing anything. Many high school guidance counselors trumpet the virtues of a university education and encourage students to apply, because it will improve their likelihood of employment and give them a higher income. Fact is, it is quite possible to make more money learning a trade (plumbing, electrical, carpentry, etc.) or another practical skill that doesn’t require a university education. While a university education does tend to offer a higher lifelong earning potential, what is often ignored in the equation is the four years in school where earnings are essentially zero (or worse negative), and the debt that students then struggle with upon graduation.
2) Save up before you go. I recommend having at least a year’s worth of tuition and living expenses saved up before going off to university. The exact amount you should have depends upon how much tuition and expected living costs will be. I had about $10,000, half of which went to tuition and book. If you don’t have any savings after high school, work for a year. There is no reason to rush to go off to university right away, especially at the cost of your future financial well-being. One less year of accumulating date can make a huge difference.
3) Work, work, work. University is a fun time, what with the drinking, and meeting lost of new people, and parties, and studying, and drinking…It can be a tad overwhelming, but make time to work. Even 15-20 hours a week during the school year makes a big difference, and then there are summers to save up the big bucks. You should be able to make at least $12,000/year even as a student. If you attend a university with reasonable tuition fees, it can be enough to live off of.
4) Live with your parents. This isn’t possible for everyone, but if you can, do it! This can be a major money-saver. I was fortunate enough to live at home for the first 2 years of my undergraduate degree before moving out and living with roommates and it helped me out enormously.
5) If you can’t live with your parents, live with roommates. Sharing accommodations can generally save you a few hundred bucks a month. Totally worth it, not to mention that you learn important life skills by living with others, such as compromise and patience. My experiences living with roommates were generally very positive and I estimate that I saved at least $7200 over 3 years by living with roommates rather than getting my own place.
6) Scholarships. These usually require good grades, but look for them and see what you can get. My wife avoided taking on loads of debt by have a renewable scholarship that essentially paid her tuition. It helps s a lot.
7) Don’t be a spendthrift. You can’t afford it. I know, you want to go out with your friends, buy booze, and whatever else teenagers buy these days. University is not a time for spending oodles of cash. It’s a time for roughing it a little. It’s actually a great time to learn about frugality and living on less. Learn to cook dried beans, veg. and rice dishes and take your leftovers to school. Eat tuna sandwiches. Go to house parties instead of the bar. Spend less!
8) Only attend the most expensive universities if it greatly increases the likelihood of getting a superior job upon graduation. Here in Canada, this isn’t as much of a problem as in the US, since the vast majority of universities charge tuition that is less than $6000/year for domestic students. There are exceptions to be sure, disciplines such as Law, Medicine, or MBA are typically more expensive, but so are the salaries of typical jobs of recent graduates in those disciplines. I’m not saying higher than average tuition costs are never justified, but you should proceed with caution whenever forking over any of your hard-earned dough, and make sure you get adequate value in return. This is especially true in the US; because of there is often a massive difference in tuition costs between many state colleges and the higher-end, more prestigious universities.