Unless you are armed with a trust fund, wealthy parents, or are one of those blessed students on a scholarship, you’re likely to suffer from heaps of financial stress during your years in college.
Recent statistics shows that currently, 44.2 million Americans are living with student debt. Last year, students left college with an average loan of $35,000. Carrying such a heavy financial burden impedes in other matters of their lives like starting a family, buying a house, and even saving up for retirement.
Financial stress is the driving force for poor wellbeing, declining academics, and retention in universities. Reducing your financial burden will help you reduce stress caused by your debt.
You’re going to have to learn to manage financial stress in order to prevent it from hindering your academic performance which will either force you to stay in college for longer or even drop out.
Here are 4 ways you can manage financial stress.
When they first go off to college, students are inclined to spend too much because they don’t have parents who’re watching over them.
Budgeting is very important from the moment you start your first semester. You won’t realize how quickly your loans will accumulate over the years so you have to watch how you’re spending your money.
After leaving college, many students admit that if they had the known how burdened they are going to be with debt, they would have done things differently. They wish they had saved more and not borrowed more than they needed to. In worse cases, they regret not attending a cheaper school.
Think of ways you can save some extra cash. Learn how to cook instead of constantly ordering take-out. Look for an affordable house and reduce your rent by getting some roommates. Buy old books, or share books with other students instead of buying new ones every semester.
- Explore scholarships and grants
Instead of looking applying for loans, explore all the scholarships and grants you can avail. These are usually granted to those of exceptional academic standing but there are scholarships and grants available to minorities and students who cannot afford to pay.
Scholarships will reduce a percentage of your fees for the semester but in order for you to retain it, you have to maintain a certain GPA.
- Loan management
Most students do not understand the terms of their loans. Instead of blindly applying for loans, determine the exact amount of cash you require. Educate yourself about the type of loans you can apply for. Are they federal loans or private loans?
There are many differences between federal and private loans. Federal loans will be a better option for most students because of their fixed rated and flexible payment terms. The fixed rates keep the debt low regardless of how long you take to pay it back. Another advantage of federal loans is loan forgiveness. Loan forgiveness provides borrowers the option of consolidating all federal loans into a single loan and lets them pick a repayment plan that is suitable for them. Loan forgiveness can also let you postpone your payment and in some cases lower it too.
Private loans are much more expensive than federal loans. They have variable rates, some as high as 18% and you will have to begin repaying while you’re in college. Private loans do not offer forbearance or deferment. Unlike federal loans, private loans can cover the cost of your entire course but again the more you borrow, the more you will owe.
- Get a job
Getting a job just adds more stress to what you already have in college but with proper organization and positive attitude, you can manage both. Search for employment opportunities on campus in order to save yourself time and money from commuting.
Regular income will allow you to save up money to pay back your loans and give you some free-flowing cash so you won’t need to rely on more loans.
Having a job through your years in college also gives you a competitive advantage when you are applying for work after college. Employers are willing to hire those that have some work experience over those who have none. The sooner you get a job, the faster you’ll be able to pay off your debt.
It’s natural to feel anxious when you are under a lot of debt but you have to keep in mind that you enrolled in college in hopes for a more financially secure future. Put in the work and make the necessary sacrifices to succeed in college with the least amount of debt possible.