Anyone with student loans understands the importance of paying them off. Student loans will linger on your financial mind as you try to save up for a mortgage, plan a trip, or try to start a family. This is why it’s important that you try to pay your student loans off as soon as possible.

Let’s go through the 5 steps to get rid of student loans:

1. Defer your student loan payments if you have to.

Before you get hit with massive late fees or destroy your credit score, you might have to ask for an extension or deferral of your student loans. This is a critical step because it forces you to get a realistic grasp of your financial situation. If you’re making decent money then you can begin with your student loan payments. If you’re struggling to find a job or aren’t earning enough money then you’re going to have to defer your student loan payments.

It’s important that you contact the company that loaned you the money in advance to let them know of your situation. Most companies are willing to work with you as you try to figure out your financial situation. This is much more effective than just hating your student loans.

2. Find any source of income to pay student loans off.

If you can’t find your dream job right out of college you might have to suck it up and take any job. The longer you hold out for that dream job, the longer you go without making any money and the longer you go without paying off your student loans or saving money. This isn’t the greatest advice to read but the reality is that during a recession you might have to accept a job that you feel is beneath you.

Just remember to swallow your pride and to do your best to ensure that this doesn’t turn into a permanent gig. You can simply turn your mind off at work and save your mental energy for other projects that you want to work on. The important part is that you’ll now have a paycheck that you can use to make your student loan payments and save up to start your side business.

3. Decrease your spending aggressively.

If you do find a well-paid position and simply just want to speed up the payment of your student loans then this idea is for you. If you want to get serious about paying your student loans off, you must cut back your spending. This isn’t sexy advice by any means but it gets the job done. In case you’re stuck on how to save money, below are my favorite ways to decrease spending:

• Prepare your own meals.
• Find cheap ways to have fun.
• Take public transportation.
• Stay at home a bit longer.

Spending money can be fun, but paying off your student loans is amazing.

4. Grow your career.

The best way to pay student loan payments is to grow your career and have more money coming in. For those that are fortunate enough to have a job right out of college, you’re in a unique and enviable position. My only advice is to find ways to grow your career so that you will be able to earn more money and pay off student loans much quicker. How can you grow your career?

• Ask for a raise.
• Take evening courses.
• Work harder than everyone else.
• Switch companies.

As you grow your career over time you’ll be able to put more money towards student debt so that you can eventually enjoy your life more.

5. Stay out of trouble.

It’s really easy to get yourself into trouble out of college. This trouble can come in many forms: legal problems, going out too often, bad habits, and spending like crazy. You must be conscious and understand how toxic this behaviour is. Spending money to reward yourself is perfectly acceptable. The problem lies in racking up massive amounts of credit card debt because you want to have a new pair of shoes or go away on a monthly trip. Since I’m not your mommy and I’m not here to preach to you, I will just suggest that you do have lots of fun post-college, but do your best to stay out of trouble.

If you want pay student loans off then this was the 5 step guide for you. What step are you at right now in paying off your student debt?

(photo credit: usdagov)

Summer jobs for students is a hot topic around this time of the year because it’s when employers start looking to hire employees for the summer season. It’s also the time of the year where college students start getting excited for the end of semester life. This is why I wanted to take a moment to congratulate you. By reading this article you’ll be ahead of the game and be looking for the best student jobs to avoid student loans.

If the title of this post caught your attention, let’s look at the best student jobs to avoid student loans:

On-campus jobs to avoid student loans:

Administrative position.

Most colleges will often hire current students to work in administrative positions that require little responsibility. Anything from watching the accounts receivable at the gym to helping a professor balance their books can be used as a decent source of on-campus income.

Tutoring position.

There are many ways you can make money on-campus and avoid student loans by tutoring your peers. You can find work as a Teaching Assistant and work closely with the professor throughout the duration of the whole course. You can offer private tutoring sessions around campus to students that are interested in help. You can also do what my buddy did. He met students in class and offered them tutoring sessions at discounted rates. Just remember that we are all good at something that someone else out there struggles with.

Tour guide.

Working as a tour guide on your college campus will allow you to meet new people and learn more about your college than you could imagine. A good source of income that will provide you with plenty of exercise and networking.

General Assistant.

Any general on-campus job from monitoring a computer lab to working as an Exam Invigilator will pay you a decent wage, while you sneak in some time to study for your next exam. Another benefit here is that you’ll be forced to stick around campus, and this way you can meet new people and stay focused on your studies.

Off-campus jobs:

If you have no luck with finding a job on your college campus or you simply don’t want to spend any more time on your college campus then you need to, you can try some of the following off-campus jobs to pay for your college tuition:

Local businesses.

Many local businesses around town hire college students to work for them. The opportunities are endless. You just need to focus on applying in advance and acing your job interview. You can make some money in town and get to know the trends in your area.

Serving drinks/food.

This is likely the best way to make money in college. Some of my friends have told me nothing but great stories from these jobs. You’ll usually end up working with lots of other college students. You can also make some decent money from tips if you work at the right location.

Now that we looked at on-campus and off-campus jobs to help you avoid student loans, let’s dive into summer work.

Summer work to pay off college loans:

Some college programs are so academically intense that you simply can’t hold down a job during the school year. This is why you should strive to take advantage of the summer by finding seasonal work to help you avoid student loans all together by earning enough money to cover your college tuition.

Some summer jobs for students that  can help you avoid student loans.

Yard maintenance.

This is where I made all of my money in high school. Cutting grass and taking care of some one’s yard can allow you to make some money while you enjoy the fresh air all summer. I personally worked with elderly people in my community. This also allowed me to hear some interesting stories from people that have been through a lot in life.

Work at a country club.

I had to throw this one in because I know a few people that did this. Working at a local country club can do wonders for your future. My friend met and created many connections in his field just be working as an assistant at a golf club.

Anything you want.

Most career advice states that you should try to enter the field as soon as possible. However, I feel that the summer months allow college students to work any job that they really want. You can simply turn off your brain and find something that you enjoy to do. Once you start your career you’ll be stressed out about moving up the ranks and trying to keep your job. For now you don’t have to stress as much.

There you have it, an extensive list of student jobs to help you avoid student loans in college. I’m curious to hear about what you did for work in college?

(photo credit: yanec)

Paying off your student loans can be one of the biggest financial issues in your 20s. College graduates often struggle with paying down student loans as they try to find the perfect job after college. As we try to plan our Friday nights, struggle with relationships, and try to save some money, these darn student loans just keep on lingering.

Can you blame student loans for bad credit? Unfortunately in many cases you can. The money that you owe will affect your credit score and your credit worthiness when you apply for a home mortgage. The good news is that you’re not alone at this. You don’t have to hate your student loans.

Today we’re going to be proactive and look at how-to avoid student loans:

Attend a community college.

If you want to know how to avoid student loans then look no further and consider attending community college. This is what I did personally. When I was 17 I had no idea how I would pay for college or how in the world I would compete academically. This was when I made the most mature decision of my life and decided to attend community college. I was able to work full-time hours, perform well academically, and figure out what I wanted to do with the rest of my life. I decided half way through that I would transfer to a major university once my tenure was complete.

One of the hidden benefits of attending community college is that you meet lots of adults. Community college courses tend to be filled with an older crowd. This allowed me to learn from older people while I tried to figure out how to avoid student loans when I went to university.

Take time off before college.

I was in a hurry to continue with my education because I knew that if I took time off I would never get back into it. I’m always skeptical about giving out this advice when it comes to learning how to avoid student loans because the person may never return to college. If you truly believe that you’re focused and determined, then taking some time off before college to work and save up money will do great things for your financial situation.

Hold a part-time job.

This is the most difficult to do, yet it’s the best advice that I can give to any college student out there. If you can figure out how to manage your time effectively, have fun (drink!), and still hold down a job, then you’ll be able to move on to amazing things in life. Think of all of the people out there that study while taking care of a family, why can’t you hold a part-time job? If you’re a dedicated 20-something a part-time job can really help you avoid student loans.

Apply for every form of free money.

I wish I knew about this earlier. Thankfully I was able to get some “free money” as I worked my butt off to ensure that I graduated from college debt free. A few common sources of free money include:

• Bursaries. Each school usually has a bursary fund that it uses to distribute a little bit of money to cash-strapped college students. One semester my friend convinced me to apply for a bursary. I didn’t really take it seriously and I still received a check for $200.
• Grants. Another popular way to avoid student loans.
• Scholarships. We will get into this in the future. Scholarships are all around us. Usually all you have to do is fill out a form and write a 1,000 word essay.

Take a program with paid internships.

This will do wonders for your financial future. My cousin earned his degree in Engineering from a very academically competitive school. The real accomplishment is that he was able to graduate from college debt free. He was able to avoid student loans because his program REQUIRED all students to work every other semester. The more disciplined students were able to figure out how to save enough money for the next semester while still having some fun.

Most programs come with paid internships that you have to find on your own. If you want to think about college programs that force you to take internships then consider one of the following options:

1. Nursing.
2. Accounting.
3. Technical programs.
4. Engineering.

Through a paid internship you will likely be able to avoid student loans and be able to move on with the rest of your life.

I’m confident that by this point you know how to avoid student loans and won’t have to blame student loans for bad credit.

How were you able to avoid student loans?

(photo credit: Adam Tinworth)

Do you want to graduate from college debt free? Is it even possible to graduate from college debt free?

The answer is yes. Today I’m going to show you guys how you can graduate from college debt free. I also want you to know that this isn’t some hypothetical post or a “what if?” situation. This is my story of how I managed to graduate from college without any debt. As of two days ago I paid off the last $326.41 that I owed my school. I will write my final exam this Saturday morning. I will officially graduate from college debt free.

This isn’t ground breaking advice. The following will be common sense tips that anyone can apply. If a dude with spiked hair can do it, so can you.

Always hold a job.

You need to have money coming in. It doesn’t matter how much money you earn per hour or how much you make a week, what counts is that you have some sort of income coming in. I personally feel that so many college students fall behind financially because they don’t have an income coming in. With no money coming in this means that you’re going to have to rely on debt (student loans or your credit card) to pay for everyday expenses.

You can’t find a job? Consider one of the following options:

1. Find work around campus. There are many jobs that pay well around the college campus. I made some decent money by working as an Exam Invigilator (watch people write exams) for the school.
2. Start a side business. Whether you want start a personal finance blog (me) or become a textbook broker, college can be the best time for you to start a sidebusiness. Plus you really have nothing to lose.
3. Find a job in service industry. You won’t always find the job that you want. You’re going to have to get your hands dirty. There’s nothing wrong with this. Working in the service industry can be a great college experience.

Save your money!

You need to save your money. I’m not talking about thousands of dollars. Even if you save $20 a week, you’ll have $1,000 in your bank account at the end of the year. That thousand bucks is much better than nothing, or an account in the negatives. A few of the ways I saved some major coin in college are:

• Living at home. I know that this sucks but it’s manageable. Thankfully, my parents gave me the basement so that I could still have friends over. Living at home can save you thousands of dollars a year on rent, utilities, and food.
• Ask for discounts. My friends from school always think I’m joking around when I ask for the “student discount” whenever we go out. It actually works. Most places do offer a student discount. I was able to save 15% off dinner the other day just because I asked for the discount.
• Save money on textbooks. There are many ways you could save money on textbooks. I would either share my books or buy them used. I rarely purchased new textbooks unless I absolutely had to.

Manage your time.

We all have the same 24 hours in any given day, you need to get the most out of yours. I’m by far no time management expert nor can I claim to posses the multi-tasking abilities of Tim Ferriss. I have just been able to use some of my time wisely. Not all of it but some. My favorite time management tips are:

1. Work now, relax later. The reverse never works. Get your work done first. Actually do the work you hate the most first. Once you’re done your work you can relax.
2. Focus on what’s important. Don’t stress about that 5% assignment or updating your Facebook feed. Do your important work.
3. Shut out distractions. Distractions are fun. Being up all night because you were distracted in the evening is NOT fun. Turn your distractions off until your work gets done.

Ignore the BS.

There are many distractions out there. I’ve been affected by all of them. From drinking into the early hours of the morning, to gym addictions, all the way to staying on Facebook instead of finishing your term assignment. These distractions will get to you. The trick is to not let either ruin your situation. Ignore all of the negativity out there and just enjoy life.

Party on the cheap.

You obviously need to party in college. I’m tired of personal finance blogs telling you not to party. I would’ve lost my mind a long time ago if I never went out. Going out is a staple of college life. Unfortunately, partying in college can cause lots of problems for some people. When I mention partying in college I stress that you SHOULD NOT use your time in college as an excuse to binge drink or engage in drug use. Partying in college is fun when you go out with your close friends for drinks on the weekend. Don’t let having a good time with your friends ruin your finances or academic life.

Random thoughts.

My last piece of advice is to apply for every form of free money out there. Apply for all scholarships, grants, and bursaries. You never know when you’ll get a few hundred bucks for free.

I wish all of you guys nothing but the best! I’m curious to hear how have you guys managed to save money in college?

[Quick note: We'll resume with the obtaining a mortgage series once again next week. Stay tuned!]

(photo credit: billaday)

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College Tuitions Rising

With some college students having an average of $23,186 in student loans, finding scholarships becomes more important to more and more students. With some parent unable to assist college students have to come up with a viable plan on their education.

What’s the costs of attending college? College Board released the following numbers:

• Public four-year colleges charge, on average, $7,020 per year in tuition and fees for students who live in their state. The average surcharge for full-time out-of-state students at these institutions is $11,528.
• Private four-year colleges charge, on average, $26,273 per year in tuition and fees.
• Public two-year colleges charge, on average, $2,544 per year in tuition and fees.

If you’re planning on finishing with no debt, you need to be more assertive with finding and applying for scholarships.

Where to Find Money for College

Now that you’re focused on getting money for college, it’s time to scour the web to find the scholarships that you qualify for and apply to them. It’s not easy as there are tons of scholarships, some obscure and very specific, but it’s possible.

Fast Web: This is a huge site that acts as a personalized search engine for scholarships. You have to take about 20 minutes or so to fill out a detailed profile, but it’s worth it. Every time a scholarship in its huge database opens up and you are qualified to apply for, you’ll receive an email to check your account.

It makes scholarship hunting much easier and you’ll have the opportunity to enter to as many scholarships as you want. Double check as student loans are also presented.

Cappex: Cappex is a bit different than another scholarship site. It not only connects you to possible grants, it can also suggest colleges that may be a good fit for you based on your profile. if you’re curious, there’s a tool on the site that estimates your chances of getting in. I wouldn’t be too focused on that; instead I’d devote time on applying for some grants.

Yakezie: The last resource is a new one. The Yakezie network just launched a monthly scholarship and it’s open to those who are willing to accept the challenge. Right now the minimum award is $500 every month, but the goal is to increase the amount as time goes by.

Since this is a new scholarship, you should check it out before other students find out.

Thoughts on College, Scholarships, and Student Loans

Graduating college without student loans is difficult, but not impossible. Some student are paying down their student loans while in college. Some are going the scholarship route.

I’m curious to have your take on it. How have you coped with college tuition? Did you have to take out student loans? What’s the interest rate for them? If you have student loans, have you consolidated them?

I graduated from University in 2005 and I am currently still paying off my student loans 5 years later. I know that some people do not like to take out student loans; they will live dirt poor through 4 years of university before they go into debt.  I chose not to do this.  I did work full time during my 4 years of university, and I still chose to take out student loans for 3 of my 4 years. 

I do not regret taking student loans to help fund my university education because my life would have been a lot harder without that extra money.  Working full time at a call center for a financial institution allowed me to pay for my basic monthly expenses such as rent, groceries, and transportation.  I was making about $28,000 per year during my studies which is approximately $14.35 an hour.  This doesn’t seem like a lot now, but it was a lot for a student. 

My student loans allowed me to pay for my tuition as well as any books and other school supplies, without having to worry about paying rent and buying groceries.  I went to school in the mornings and I worked from 2:30 pm to 11:00 pm at the call center.  I chose to work for a financial institution because they pay was good, the benefits were excellent, and I was studying Economics. 

I borrowed a total of $12,333.23 from the Federal Government for my student loans.  After my graduation in December 2005 I had a 6 month grace period before I had to start repaying my student loans.  My original student loan agreement was for 10 years. But I make more than the minimum payment each month; therefore my student loan term has been lowered to 100 months, which is just over 8 years.  Even $10 extra per month will help to significantly lower the term of a student loan.

The interest rate on a student loan is lower than a regular loan or line of credit from a financial institution.  This is great for student loan borrowers because the majority of our payments go towards the capital repayment, which helps pay off the student loan quicker.  The current interest rate on my student loan is prime rate plus 2.5%.

I currently have 41 months remaining on my student loan and $5846.91.  I am in no hurry to pay off my student loan because the interest is tax deductible on my annual income tax return.  My biweekly payments are debited directly from my checking account and therefore my student loan payments are helping to maintain my good credit score.

(Photo By Dimitry )

Many parents want to help out their children in college education, but their current financial situation leaves them unable to provide the cash for college. Some of them have turned to Federal Plus loans as an option.

These are low interest rate loans that parents can take for their child(ren)’s college tuition. Students who have little or no financial aid and no credit history may think this is the best deal for everyone, but is it? What are some of the advantages and disadvantages of the Plus loans?

Advantages of Federal Plus Loans

Depending on your circumstances, there are some benefits to taking out a PLUS loan.

• PLUS loans can cover up to 100% of the cost of tuition
• Right now, fixed interest rate of 7.9% for loans taken out July 1, 2010 or later
• Interest could be tax deductible
• You can borrowed directly from the government or a private lender
• The loan’s repayment term usually is 10 years.

For families that can afford the payments, having PLUS loans allows them to send their kids to college without having their child(ren) in debt. Right now the average debt for college students attending a four year public school is a little over $20,000.

Disadvantages of Federal Plus Loans

• Parents are responsible for the loan
• Loans come with fees (origination is typically 3% of the loan)

I think that having the parents solely responsible for the student loans can be detrimental to the family. Students may not realize how significant the debt is if someone else is taking care of it. Parents may stress out as their kids switch majors and explore subjects, as the loan gets larger. If something happens to their income, parents can have their credit history trashed.

While these loans are typically low interest, they are not free to get. Are the parents expected to foot the bill for those expenses too?

Effects on the Family

Is getting a loan through your parents the best option? You all have to decide for yourselves. My suggestion is to answer some of the questions below and see if you can come to an agreement.

• Can the family afford the loan payments?
• What portion should the student be obligated to contribute once they graduate?
• Will students or parent pay if a major is changed?
• Is the student expected to work in the summer to help pay for the loans?

If you decide on getting the PLUS loan, make sure you put everything into writing. Everyone should be on the same page and you want to keep everything transparent.

Your Thoughts

Do any of you have parents who have taken out Federal Plus loans? What have been the benefits? What have been the disadvantages?