Student Debt Crisis: A Few Ways To Escape It
The student debt crisis has dominated news headlines in the last few years. I myself graduated from college with a little under the 2017 undergrad average for private colleges. Adding in the purchase of a gently used car put me right up there with the average having about $33,000 in debt to pay off.
It’s definitely a weight on many new grads’ shoulders. Couple that with a pretty competitive job market, and there’s bound to be some people struggling to make payments on their loans. The good news is that there are ways out of this dilemma. Some are higher up at the government level and others are up to you as a new grad.
Let’s first take a look at things you can do to dig yourself out of the hole. Actually, let’s look at how you can avoid the hole altogether.
1.Use Community College to Your Advantage to Fight The Student Debt Crisis
I always say that if I could go back a few years to when I was starting out, community college would be my first stop. Freshman and sophomore year were awesome at my undergrad, but it also wasn’t cheap! I probably would have had half the student loan payments that I did after graduating if I’d done general courses at community college. It’s not a complete antidote to the student debt crisis, but it can sure help.
Some community colleges out there are even offering bachelor’s degrees now. Take a look at this list of 4 year programs in California from the Santa Rosa Junior College’s website:
- Airframe Manufacturing Technology, Antelope Valley College
- Automotive Technology, Rio Hondo College
- Biomanufacturing, Mira Costa College
- Biomanufacturing, Solano College
- Dental Hygiene, Foothill College
- Dental Hygiene, West Los Angeles College
- Equine and Ranch Management, Feather River College
- Health Information Management, Mesa College
- Health Information Management, Shasta College
- Industrial Automation, Bakersfield College
- Interaction Design, Santa Monica College
- Mortuary Science, Cypress College
- Occupational Studies, Santa Ana College
- Respiratory Care, Modesto Junior College
- Respiratory Care, Skyline College
That’s just in California, so you should check out the options in your own state if you don’t live there. Many companies, like accounting firms during tax season or sales organizations don’t care too much where you went to school. Having the degree is what can get you into a lot of sales gigs in the first place. They’re more concerned how good you are at selling – not where your piece of paper came from.
2. Consider Online School
The two things that made up the bulk of my debt after college were my student loans and a car loan. The student debt crisis isn’t the only dilemma facing recent grads – cars can be expensive. I said yes to a rate of about 7.5% on the car, although I was in kind of a situation where I needed one fast so I didn’t want to mess around.
Going to school online is a great solution to this issue since you don’t need to worry about commuting or a high-interest car loan!
3. Student Debt Crisis Option: Refinancing
Given our current circumstances, student loan refinancing only makes sense if you have private student loans. However, your federal student loans will begin accruing interest and payments will resume again on October 1st, 2021 as of this writing.
Depending on your rate, it might make sense to look at refinancing as an option. It could save you a boatload of money long-term if you lower it by a few percentage points.
4. Widespread Loan Forgiveness
Personally, I would never bank on widespread student loan forgiveness actually happening. However, it’s looking more and more like a possibility in the future as a solution to the student debt crisis. In the 6 months that President Biden has been in office, he’s cancelled about $1.5 billion in student loans.
That’s including a recent $55 million cancellation the other day. Again though, if you’re a person with a decent-paying job and can afford your payments, keep making them. That brings me to my next point.
5. Work Hard, Make Payments, and Watch It Disappear
A time-tested way to effectively deal with a student debt crisis is to make the payments. Yes, it might seem archaic. Even crazy to some people. However, I’ll never regret taking the avalanche approach with mine (and the car loan). It did sting a little bit dumping most of my paychecks into the loans for about two years, I won’t lie there.
However, it would’ve stung a lot worse if I let the debt pile up and just made the minimum payments. Stay focused on your job, rip the debt-bandaid off, and set up those automatic payments. Either that or set calendar reminders to manually make the payments.
Do you feel unemployable because of a useless major? Guess what, you can still get a sales job. It may be your only way out, so don’t knock it till you try it.