What Can I Do to Minimize My Student Loan Debt?
As a financial aid administrator, I often get many questions from students and
parents about how to qualify for financial aid, or what they can do to get more financial aid. Rarely do I get the question of how they can graduate from college with the minimum amount of debt. Just recently, this was the topic of a meeting I had with a current college freshman.
Considering that in June 2010, student loan debt outpaced credit card debt and is now close to a trillion dollars, this question should not surprise me as it continues to concern students enrolled in college. So what exactly can students do to minimize their student loan debt? The answer is quite simple; focus your energy on winning scholarships. The how-to is much more difficult to achieve, but it does not have to be.
In my experience, many students spend a large portion of their time searching for scholarships and a lesser amount of time preparing to become a competitive applicant. Students need to invest more time into writing an excellent essay in which they tell their story and include not only their academic goals, but also their life purpose. They should also include in their essay their family background while maintaining focus on themselves, their most difficult obstacle and more importantly how they overcame it, what character qualities they learned, their experiences serving others in the community, and finally why they need a scholarship.
Challenges of Writing the Scholarship Essay
One of the many challenges students face in winning scholarships is often times students do not know where to begin when it comes to writing the scholarship essay. They stare at a blank screen on their computer and are paralyzed when it comes to putting their thoughts on paper. Many students need assistance to guide them through the process. Edudaris™ offers this opportunity for free in an online platform. Students are guided step by step with a résumé and essay builder, worksheets, videos, and tips on how to actually win scholarships. Whether students are working on the scholarship process through the free online Path to Scholarships® course on Edudaris™ offered as a class through their school, or as a self-paced, independent course all students benefit immensely, because by joining Edudaris™, they are never alone.
The reality is most students will not win ALL the scholarships for which they apply. Most students pay for college with a combination of grants, loans, scholarships, and by working. However, the more scholarships students win, the less they will have to borrow to pay for their college and living expenses. Students who choose to use student loans to assist them pay for their college education, should first pursue federal student loans through FAFSA.
Subsidized Loans vs. Unsubsidized Loans
Some loans such as subsidized loans are more affordable to students because while the student is enrolled at least halftime interest does not accumulate. Students may also be offered an unsubsidized loan; while the interest for this loan does accumulate, repayment for both loans begin after the grace period ends, six months after the student is no longer enrolled in college at least half
time in a degree-seeking program. Because these loans are funded by taxpayers, students benefit by the different federal protections associated with these loans, such as grace period, deferment, forbearance, and repayment options. It is widely recommended that students first exhaust their federal loans before considering private loans which are credit-based, generally have variable interest rates, may require a co-signer, and do not have as many federal protections.
Although winning a scholarship requires much work and effort from all students, in comparison, it is not nearly as much work and effort as it takes to repay a loan that may take 10 to 20 years to repay. Making sacrifices now by living on a budget, living at home, applying for all scholarships, limiting the yearly loan amount, attending a less expensive college, will undoubtedly allow students to be in a better financial position upon graduating, entering the workforce, going to graduate school, or buying a first home.
Testimonials
“I am not afraid of applying to schools anymore because I think I can’t afford it,” he said. “I know I am going to get in somewhere that is best for me and I will be happy.” The result at the end of his senior year was almost a half a million dollars of scholarships which included the Bills Gates Millennium Scholarship, admission to Columbia University paid in full, and scholarship money to pay for his education from the freshman year in college through medical school."
St. John Newmann High School, Naples, Florida
"Another record year at Chapel Hill High School with over one million dollars in scholarships using Path to Scholarships®! A record of nine students received Faulconer Scholarships for five years and one Dell Scholar!"
Frances Palmer, Counselor, Chapel Hill High School, Tyler, Texas
"Path to Scholarships® is a very effective program that guides students step by step. The program not only guides students through the scholarship process, but also teaches them to speak from within in learning about their life purpose. Through this curriculum students are equipped and prepared to move on to the next level!"
Jaime Valverde, Counselor, Woodburn High School, Woodburn, Oregon
*All testimonials are subject to our Disclaimer.