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Common Misconceptions About College Without Student Loans

student loan and financial aidAre you trying to determine how to pay for your college education? This is one of the most controversial debts today because it is not only compromising the finances of the youth, it is also jeopardizing the future of the economy.

A lot of our youth are graduating from college with a lot of debts to their name. Student loans get most of the graduates through to college and that is one of the biggest debt problems that they are facing. They accumulated this debt even without a proper job yet. That is why their first decade of earnings will have to carry the burden of paying off these college debts.

With their money tied up with debt, they are unable to make investments early on in their life. It is difficult for them to buy a house, a new car and other things that will make their lives more comfortable. Some of them are even delaying life events like marriage or parenthood because they know that they have to prioritize paying off these student loans.

This is why a lot of incoming college students today are trying to find ways to go to college without having to apply for any college loan.

This issue came further into the limelight when Germany recently announced that all their universities will be free to all students – local and international. According to the article published on, higher education across the country is now free for all. The tuition fee was actually already low to begin with. But with this announcement, it is not more possible for financially struggling students to get an education.

Of course, not everybody is open to the idea of going to another country to get an education. Some parents are not ready to let their kids go too far while other kids are just too immature to be left alone in a new country.

That only means they must find a way to try to go to college without getting into any, if not a lot of student loans.

The good news is, there is a way to go to school without college debt – as long as you know the difference between fact from fiction.

Common myths for those who want a college degree without the debt

According to an article published on, the Class of 2014 is now the most indebted class. The average debt that a graduate has to pay off is at $33,000. This will take more than the standard decade to pay off for some graduates. If compared to the debt 20 years ago, this average debt is almost double than what they had to pay back then.

Getting into college without student loans is not impossible but you need to understand your options. Some incoming college students can actually qualify to get higher education without debt – but they failed getting it because they believed in a couple of misconceptions.

Misconception 1: Community colleges do not have scholarships.

Despite the fact that they charge really low tuition fees, that does not mean these colleges forego scholarships. They still give this away to qualified students. Even if it is a $1,000 scholarship, it will still help you spend on other expenses apart from your tuition fees and books. Anything that you save here can be put aside to grow in an investment fund for two years. That way, you can use the money to pay for your schooling once you enter into a state or for profit university.

Misconception 2: The only way to avoid student loans is to go to a community college first.

In truth, going to a community college will decrease the chances of you needing a student loan. However, this is not the only way. There are a lot of schools out there that offer scholarships to qualified students. State universities offer great scholarship programs if you have the talent and grades to qualify for it. You may want to ask your high school counselor to give you a list of scholarship programs that you can apply for so you can identify the schools that you can qualify to go to. If you do qualify, you do not have to go through the hassle of going to two schools just to complete your education without student loans.

Misconception 3: Students can only financially prepare for a debt free college education.

This is true – you need to be financially prepared to go to college without debt. However, that is not entirely true. There are students who can go to college even if they or their parents did not prepare financially for it. If they did good in school, it will be easier for them to get a college education without the need to borrow money.

Misconception 4: Filling out the FAFSA is only to get help for student loans.

According to, the federal government’s student aid program offers financial aid in various forms. If the parents of the child serves in the military, he or she is qualified to get aid from the government. You can also apply for work study and tax benefits to lessen the load. If you get a grant, it will help you pay for your college education without borrowing money at all. So do not skip that FAFSA (Free Application for Federal Student Aid).

Strengthen your financial position despite student debt

It is really a dream of high school students to go to college without student loans. However, the reality for some students is, they cannot escape borrowing money to go through college. Sad as it may seem, there are those who really have no choice about it. While a lot of scholarships and grants are there, not everyone qualifies for it.

So if you are one of these unlucky few, do not lose hope. There are still ways for you to demolish student loan debt – or at the very least, minimize the negative effects of the debt to your financial future. Here are some tips that we have for you.

  • Get a job. Believe it or not, you will not spend every waking moment of your college life studying. You will find a lot of free time that you can use to earn some decent money. You can use this money to help pay off some of your expenses. Or you can use it to grow your savings. If you borrowed money, you can pay it off while you are still in school. That should lessen the amount that you have to pay off when you graduate.
  • Do not accumulate more debt. Some college students get into trouble because not only do they have student loans, they also have credit card debts. There are many things that you can do to cut credit card debt but it all begins with you being wise about how you use it. We are not really saying that you do should not use your credit card. You can do so to help you build up your credit score. However, make sure that you can pay it off immediately so you do not accumulate a balance on it.
  • Budget your money. Whether your money is coming from student loans, your parents or your part-time job, make sure you learn how to budget it. That way, you can prioritize your payments and eliminate those that are unnecessary. It will also allow you to monitor if you are going beyond your means or you are doing alright with your money. Through your budget plan, you can see if your money is already running short. You can do something about it before you run out.

If you need help with your student loans, National Debt Relief offers counseling to those who want to solve their debts. The service includes helping the borrower find the best debt relief option that will help them pay off their student loans. The company will even help you with the documentation. This will only cost you a one time service fee that you do not have to repeat. It will be placed in an escrow account that will only be released when you are satisfied with the paperworks done by the company. There are no upfront or maintenance fees.

2 Factors That Will Keep Your College Debt From Ruining Your Life

graduate chained to student debtCollege debt will never be a prerequisite to getting a college degree. All it really takes are good planning skills from parents and great financial habits from the student. While a lot of students are not financially well off to be able to get assistance from their parents, that does not mean they can let student loans ruin their lives.

You do not need to hear some really bad news about student loan debt to decide that you need to make a smart choice about it. You owe it to your future self to make a wise choice about your finances period. Regardless if you are still in school or you have rich parents, you need to learn how to manage your money so you can go out into the world and make yourself wealthy through your own efforts.

College loans will be more costly this year

Getting a higher education without college debt seem like a tough thing to do – but it is not impossible. There are a lot of students who have gone through this phase in their life without having to borrow a single cent.

But if you think that is impossible for you to do because you do not have enough time to save up for your tuition fee, that is alright. You can borrow money to pay for your college education, but make sure that you will do it correctly. More than ever, the situation now requires each and every student who will borrow money to be wise when it comes to taking out student loans.

According to an article published in the interest rate for school year 2014-2015 will be higher than last year. It is expected to rise by 0.8%. It may seem like a small percentage but the bigger the loan, the bigger interest amount you will be forced to pay off. The article said that the Stafford Loan that is an aid reserved for undergraduates will go up from 3.86% to 4.66%. The rate for the Direct unsubsidized loans for graduate students will rise from 5.41% to 6.21%. Direct PLUS loans for both parents and graduate students will increase from 6.41% to 7.21%.

All of these data will really make life a lot harder for students who need a loan to go through college. But even if you are trying to wrap your head around this financial difficulty, you might be comforted to know that all is not lost. With some effort, discipline and self control, you can focus on two factors that will help keep college debt from ruining your future.

Your degree determines if you can afford your student loan payments

The first factor involves the degree that you choose to study. If you need to borrow money to get a particular degree, you must ensure that it will lead you to a career that can afford to pay it off. It does not matter if you study medicine, education or political science, you need to repay student loans.

Let us lay them out for you and connect how this is important in relation to your student loans.

  • Your degree will tell you the career path that you can take. The best way to choose a college degree is to determine what type of career you can work on for the next few decades of your life. Do you picture yourself being a teacher, a doctor, a lawyer or a businessman? Or do you see yourself being an inventor or a scientist? You want to look at the career you want to have before you choose the appropriate degree that will allow you to qualify for that career.
  • Your career will determine how much you will earn. Thanks to the Internet, you can easily see how much professionals are earning these days. If you want to be a doctor, you can check out the average earning potential. You can narrow it down to specialty and even location.
  • The expected earnings of your intended career should define if you can afford to pay off your college debt. Finally, once you know that national average, you should be able to make a smart decision as to whether you can afford the student loan payments that you are trying to apply for.

It is as simple as this: if you have chosen to be a teacher by profession, why would you put yourself through $100,000 debt when the average salary of a teacher is only $30,000 to $40,000 annually? At least, this is true when you are just starting your career. It does not make sense to pay so much when your salary is not expected to be at par with what you have to pay off. revealed that 51% of Americans who have college debt through the Education Department (Direct Loans) have difficulties with their payments. A lot of those who are not making payments have said that the cause of that is financial hardship. Do not be a part of this statistic by making a wise choice about your degree in the first place. If your chosen career can only pay yourself this much income, then know the limit of student loans you can borrow. That will keep your debt from eating more than half of your monthly salary and making your life a living hell.

Your college expenses will set the pace for your financial future

The second factor that you need to look into is your college expenses. How you spend your money while you are studying will set you up for a life of debt or financial success.

According to, the undergraduate budget for SY 2013-2014 are as follows:

  • Public 2-year Commuter: $15,933 ($3,264 tuition fees; $7,466 room and board; $1,270 books and supplies; $1,708 transportation; and, $2,225 other expenses)
  • Public 4-year In-State On-Campus: $22,826 ($8,893 tuition and fees; $9,498 room and board; $1,207 books and supplies; $1,123 transportation; and, $2,105 other expenses)
  • Public 4-year Out-of-State On-Campus: $36,136 ($22,203 tuition and fees; $9,498 room and board; $1,207 books and supplies; $1,123 transportation; and, $2,105 other expenses)
  • Private Nonprofit 4-year On-Campus: $44,750 ($30,094 tuition and fees; $10,823 room and board; $1,253 books and supplies; $990 transportation; and, $1,590 other expenses)

It may be safe to expect that these will the expenses that students of SY 2014-2015 will go through. The thing is, you do not have to borrow all the money needed to completely finance your way out of college. It is understandable if some students will find it hard to fully demolish student loan debt. But that does not mean you cannot lessen it.

Here are some tips that you can use to lower your college debt.

  • Get a part time job. You can probably pay for your daily expenses through the money that you will earn. Or, you can build up your emergency fund so you do not have to be financially short when an emergency strikes.
  • Budget your money. Learning how to budget is very important because it allows you to identify your finances and decide where it should go to. You can prioritize your expenses and make sure that your money is not wasted an only spent on the important purchases.
  • Study hard. Another way to lower your expenses is to just study hard. You may be able to qualify for a scholarship the next year so make sure your grades are up.

Here is a video from ABC News about how you can increase your source of cash and lower your expenses while you are in college.

If you need help with student loans, National Debt Relief offers a consultation service that will help you select the right debt relief program to make your payments easier. The company can help you find the right program based on your financial situation, employment conditions and college debt. National Debt Relief will even help with the documentation. There is a one-time service fee involved that will be deposited in an escrow account. When you are happy with the service and the paperworks, only then will the payment be released.

3 Facts About College That Will Set Up Your Financial Future

student holding a past due envelopIf you want to keep college debt from crippling your financial future, you need to make sure that you will act appropriately while you are in still in school. Some people make the mistake of partying all the way through college and end up living like a student on a limited budget once they start working. That is because they are already paying for the financial mistakes that they made in the past.

Study shows that what you do in college will affect your life

What you do in college have serious effects to your future. In fact, conducted a poll survey that proved how a students life in college affected them after graduation. It is interesting to note that your level of work engagement and your overall well being will be affected by how you acted back in college. The bottom line of the study revealed that college graduates would have been more engaged with their work and thriving in various areas of their well being if:

  • Their school prepared the for life after graduation
  • Their school were sincerely concerned about the long term success of students
  • They had a mentor in college, had a professor who got them excited about learning and cared about students as a person
  • They had an internship in college, active in extracurricular activities and worked on a project that took the whole semester or more to complete

3 important truths about college life and your future financial standing

From the above study emerges three important truths about your college life that has a significant impact on your financial future. Let us discuss them one by one.

Where you graduate is not important.

An article published on the revealed an interview with Laszlo Bock, the VP of Google that is in charge of hiring people. He mentioned that the GPA and the school were a graduate came predicts nothing about how they will perform in the company. In fact, there is a growing number of people in the company that did not have any college degree. While good grades are still important, they have observed that it is not the defining factor that will make a graduate successful. What is important are the skills that the student will get from their school. That being said, you should know that you can come from a community college and avoid high student loans and still be successful in big companies like Google.

What happens to you in college will set you up for life after graduation.

In connection with the previous, the Gallup study revealed that it is experience and skills that you will get from college that will define your success in your work. In effect, that will have a profound impact on your earning potential. Business owners are attracted to people of skill, not those who graduated from Ivy League schools. If you tap into the right influences like a mentor and social skills you get from extracurricular activities, you will find yourself more engaged to your work. The dedication that you will display can be evident in your output and that will make you shine in your work.

What you spend in college will come haunt you after.

This is not really directly indicated in the Gallup study but considering that we are trying to identify the factors that will affect your financial future, we need to incorporate this fact. It can be logically assumed that student loans, credit card debt – these will haunt your paycheck for the next few years – even a decade. You need to be careful about how you will use them or if you will use them at all in college. According to an article published on, the higher your student loan debt, the more of your lifetime wealth will be compromised. Instead of investing the money you get from your paycheck, you have to share that with your payments. This is true for both student loans and credit card debt.

Financial practices of a college student to set them up for success

Given the truths that we just discussed, you have to consider how your financial practices in college should be implemented to set up your future correctly. You can influence your financial future even as early as your high school days. If you start saving your college to avoid student loans, that will start you up on your personal wealth early in life.

But even if you failed to start while you were in high school, you still have time to correct your finances when you reach college. Here are 5 things that you can do to take care of your finances as early as now.

  • Implement a budget plan. Regardless if your parents are supporting you 100% or not, you have implement a budget in your life. This is a habit that you will need until the very end. It will help you reach your financial goals and more importantly, it will keep you from debt. Most people live on a limited income and a budget plan will allow you to point out the expenses that you need to prioritize. It will help you make smart choices about your money while in college.
  • Learn about your debts. This is true for both student loans and credit card debt. A secure financial future does not necessarily mean you do not have debt. It means you may have debt but you have full control over it. Not only that, it also means you have a backup plan in case your main source of income is compromised. To create this plan, you need to understand your debts thoroughly. Your ignorance might lead you to make mistakes that could have been avoided if you only researched about your debts.
  • Reserve your credit cards only for emergencies. Student loans are bad enough and your financial future will be much worse if you combine it with unnecessary credit card debt. You can understand how this can jeopardize your financial future. Keep your debts low and if you have to use a credit card, make sure that you have a plan to pay it off before the grace period ends.
  • Get a job. If you need to get money for your college expenses, do not use your card or go running to your parents. Get a job and finance your own expenses. Not only will it teach you to be self-reliant, it will also give you the skills that will prove to be helpful when you start applying for a job. Remember that internships and skills are major factors that Gallup mentioned you need to be engaged and thriving in your future life.
  • Live a frugal life. When you are a student, you get all sorts of discounts. Make sure that you source these out so frugality will not seem restricting. If you learn about the true practices of frugal living, you will realize that it is not about deprivation. It is learning how to have the things that you used to enjoy without spending too much for it.

Statistics show that college graduates enter the corporate world with a lot of regrets about life. You do not have to be part of this statistic. Make sure that you will learn how to set up your financial future so it will be poised to grow exponentially. If that means you need to stay away from student loans, then you should know that your skills and college experiences are more important than the expensive colleges that are popularly preferred. The quality of college education is important – not where you got it.

In case you need help with your student loans, National Debt Relief has a program that can provide you with consultation services. Their trained experts can advise you about you student loan repayment options based on the type of debt that you have and your employment situation. They will even help you with the paper work involved. This service has a one time fee that will be placed in an escrow account. When you are satisfied with the service and the documentations done on your behalf, that is the only time the fee can be released. There is no upfront or recurring maintenance fee.

Are Student Loan Repayment Programs Making Things Worse?

man chained to debtStudent loan repayment programs were set up by the government to help consumers battle this fast rising debt. Just as the nation is starting to improve their mortgage and credit card debts, we see college debts continue to rise at terrifying heights.

In a recently published report in, the total student debt from 2004 to 2012 grew from $364 billion to $966 billion. Now it is more than $1 trillion. The majority of the borrowers are owed by those below the age of 40 who owe 66% of the total college debt.

Student loans have continued to plague the country in general. It is ruining the financial future of households, especially that of the young adults. Some people say that it is not really so bad because the average debt of $25,000 has a very high variation between the 39 million borrowers. 40% of them owe $10,000 or less, 30% owe $10,000 to $25,000, 3.7% owe more than $100,000, and 0.6% owing more than $200,000 in accumulated college debts.

But despite the majority owing less than $10,000, why are there a lot of student loans in deferral or delinquent? Why is the default rate of this debt continually rising when the mortgage and credit card debts are not? Obviously, consumers know what to do with their debts but the student loan problem seems to be too great for them to improve the way they handle it.

While the government is trying to help borrowers through the student loan repayment programs, you cannot help but wonder if it is really making things okay. Is it really helping or is it making things worse?

What are the different programs for student loan payments

Before we really dwell into the problem of the repayment programs, let us identify the different options that students have when it comes to paying off this debt.

According to the information found on the Student Aid website, here are the different student loan repayment programs:

  • Standard Repayment Plan. This allows borrowers to pay less on interest and a fixed amount of $50 or more per month. This can last up to 10 years.

  • Graduated Repayment Plan. Through this plan, you will end up paying more compared to the standard plan. You will start off with a lower payment that will increase every two years.

  • Extended Repayment Plan. This permits you to make lower contribution than the usual 10 year plan since the payment period can be stretched to 25 years. The payments can be either fixed or graduated. The qualifications will depend on the type of debt that you owe.

  • Income-Based Repayment Plan. This means your monthly payment will be 15% of your discretionary income. This can go as long as 25 years to pay. At the end of the 25 years, the debt can be forgiven.

  • Pay As You Earn Repayment Plan. This plan allows you to pay only 10% of your discretionary income. The payment plan can take up to 20 years and unpaid amounts by that time can be forgiven.

  • Income-Contingent Repayment Plan. Your payment will be computed based on your adjusted income, family size and your student loans. This plan can take up to 25 years to complete after which, the debt that is unpaid will be forgiven.

  • Income-Sensitive Repayment Plan. This computes your payment based on your annual income. As your income changes, so will your contributions. This plan will only take 10 years to complete.


Take note that any forgiven debt is usually imposed with income tax. Each of these will also require you to qualify for them. Things like your income amount and proof of financial hardship are among the requirements for some of the student loan repayment programs.

There are also other type of student loans that will have different set of payment options. You need to understand your option to determine if they will make your student loans worse or not.

3 problems with the repayment programs for college debt

Now that we understand the various options to get out of student loan debt, let us discuss why it may be making things worse. We have found 3 different reasons why the student loan repayment programs may actually be doing the problem more harm than good.

It makes students reckless with borrowing.

We need to seriously teach our children how to borrow money wisely because it is clear that they have no idea how to go about it. In most cases, students do not give much thought to borrowing because they know that there are programs that will help them come payment time. If they know that they have a safety net, it will encourage them to take the debt plunge even before they fully understand the implications of their actions. More than that, it will teach them to rely on these programs just to get themselves out of debt. If the repayment plan is not available, you can be sure that these students will be more cautious of the amount of debt that they will borrow.

It makes lenders complacent in lending.

Since the government backed repayment programs will ensure that the loaned amount will be returned, lenders are becoming too complacent in approving and issuing student loans. If the government will not back up the defaulted loans of student loan borrowers, the lenders will be forced to impose higher rates. That rate should make students think twice before they get a loan.

It puts a strain in the budget of the government – and in the end, taxpayers.

Lastly, the student loan repayment programs put a strain in the government budget. Instead of being able to put more funding in other programs, they are forced to help pay back the student loans. And who is suffering in the end? The recipients of other benefits and the taxpayers who will eventually be forced to pay more just so the government can afford funding the programs they have set for the country.

Bottom line is, the student loan repayment programs does not deal with the real problem – irresponsible borrowing and lending. Lenders have to make sure that the repayment ability is checked thoroughly before lending. Just like in debt relief, you do not just pay for the debt, you have to understand what got you there in the first place. There are many strategies to help you stay out of debt and that is what we should be focusing on right now.

What is the best way to deal with the student loan problem?

While the student loan repayment programs are trying to help, it is not the whole solution. If you really want to demolish student loan debt, you have to understand that we need to stop the borrowing – or at least, the irresponsible borrowing. Here are some suggestions that might be worth considering.

  • Make sure the students understand what they are getting themselves into. When you ask a new graduate who is trying to pay off their debts for the first time, they will always complain that they wish they knew more about it before borrowing. All students have to be oriented, tested on their knowledge and asked to come up with a payment plan for the student debt. That should even be made part of the requirements before being approved of a student loan. It is important that they know what will happen if they fail to pay their debts.

  • Revise the process by which the lenders approve of student loans. The lender have to impose stricter processes that will help filter students who has more ability to pay back the debt. This may need to be well thought out because the borrowers do not have any credit history at the time of application. Something along the lines of the previous suggestion should do the trick.

  • Regulate the college fees to keep them from going up. According to, a state college now costs approximately $22,000 while a private college costs $44,000. It keeps getting higher as the years go by and the government has to do something about the increases.

  • Set a limit on how much a student can borrow. This has to be based on the industry that the student wants to work in. For instance, if a student wishes to be a teacher who earns an average of $30,000 to $40,000, they should not be allowed to borrow up to $100,000 worth of debts. That is just crazy.

Although we have to admit that the student loan repayment programs have good intentions and have helped some borrowers, the negative effects may prove to be destructive in the long run.

In case you need help with your student loans, National Debt Relief recently launched their student loan program that provides consultation services to help borrowers with their debts. Their debt experts can help borrowers analyze their debt situation and point them to the right student loan repayment program that is best suited for them. The service includes the paperwork that will help the borrower enter into the program. The charge for this service is a one time flat fee that will be placed in an escrow account. Once the client is satisfied with the results and the documents done by National Debt Relief, that is the only time that the service fee will be withdrawn. This fee is a one time flat fee. There is not maintenance or upfront fees that will be charged.

Keep College Debt From Crippling You Further: Tips For New Grads On A Tight Budget

two men shaking handsAlthough there are many ways that student loans are jeopardizing our future, that does not mean we should take it lying down. If you graduated from school with a lot of college debt, you know that you only have 6 months of freedom before the bills start coming in. After that, you can expect a decades worth of student loan payments that will eat up your hard earned money.

As bad as that may sound, it is not as alarming as the current situation of our student debt crisis. According to the, as the mortgage and credit card debt delinquencies go down, the student loans continue to rise. But even as more and more people fail to pay their college debt, the loans are still being distributed without really improving the system that will determine repayment capabilities.

This scenario leads to a tough beginning for our new graduates. It is not unlikely that a lot of them are forced into a tight budget that will keep them from grabbing financial opportunities. If you are a new graduate and you can relate to this problem, then you should know that there is a way for you to keep your student loans from endangering your future. That being said, let us discuss the three important things that you need to look into so you can achieve financial independence.

How to set up your budget to pay off your student loans

First is setting up your budget. If you never heard or used this while you were in college, this is your wake up call. One of the reasons why you are in debt is probably because you failed to budget your money.

If you did not know, budgeting is another way to get out of debt. Regardless if you are currently employed or still looking for a job, you may want to start working on this budget before your college debt bills start knocking on your door. Here are some tips for you to set up a budget plan on a tight budget.

  • Determine your frugal budget. This basically means you have to know the amount of money that you need to have to pay for your most basic necessities. Think of it as your baseline budget. When we say basic, that means food that is eaten inside the house and prepared by you. While you may not like the sound of frugality, you really have no choice about it. Besides, you do not have to use this – at least not yet.

  • Think of what else you can cut. Setting aside your baseline budget, look at your other expenses and see what else you can cut back on. Do you really need to have a mobile plan or will a prepaid plan serve your communication requirements? Is that gym memberships really necessary or can you terminate that and just utilize what you can exercise on for free? If you think that your parents will not mind, check if you can move back in while you are trying to strengthen your financial position. You will still contribute at home but at least, it will not be as costly as when you are living on your own.

  • Work on a source of income. If you are still looking for a full time job and you are finding it hard to land one, settle for a part time job or some freelance work to get by financially. You can do online jobs or you can continue the college part time jobs that you used to have. If you are lucky enough to look find a job at this point, scrutinize your income to see how your trimmed expenses measure up to it.

  • Create a budget that give you a lot of room for your college debt payments. Consider your baseline budget, the expenses that you can cut back on and your income. Then, you need to look at your student loans and determine how you can maximize the money that you will contribute to your debts. This is when you decide if you should implement your frugal budget plan or not.

Build up your emergency fund despite the huge loan payments

After working on your budget, you need to turn your eyes towards your emergency fund. Most new graduates do not have an emergency fund because they know that they still had the financial support of their parents. But now that you have graduated, that is no longer the case. You need to start asking the basic questions that will help you compute your emergency fund target.

An emergency fund is important because it will help tide you over the difficult times without putting yourself in debt. You should not wait for the unexpected before you start thinking about your reserve fund. Here are some tips for you to build up your emergency fund despite the college debt that you have to pay and your limited budget.

  • Set realistic goals. No matter if your goals are big or small, it can really help you focus and also raises the chances of your meeting your targets. Think about the amount that you want to save up for and come up with a plan to meet that. Use your budget as reference of what you can and cannot afford.

  • Tell others about your plans. It can be a close friend, your special someone or your family. When you tell someone about a goal that you want to reach, the embarrassment of failing is one motivation that will push you to reach your goal.

  • Adapt a cash only policy. Given your limited resources, you want to make sure that you will never go beyond your budget. Adapting a cash only policy will ensure that you will not spend beyond your means.

  • Put aside money – even if it is small. Do not be discouraged if it turns out that you can only save a small amount at a time. Saving dimes is better than nothing. Soon, that money will grow bigger – at least if you stay true to your savings.

  • Look for a part time job. In case you already have a job and it is still not enough, you may want to get a part time job. We’ve mentioned freelancing as an option that you can do. Why not explore that option.

  • Sell the stuff you do not need. If you have postponed it until now, you should start thinking about selling the things that you had in college that you do not need anymore. Anything that you get from the sale has to go to your emergency fund – 100%.

  • Do not forget your tax refund. According to an article published on, there are 1 million taxpayers who failed to file their tax returns. This makes them unqualified to claim their tax refund. The current unclaimed tax refunds in 2010 is $760 million. The article mentioned that most of the people who failed to get their tax refund are students and part time workers. This is your money so make sure that you can claim it.

Tips to pay off your student loan debt

Once you have your set up your budget and started on your emergency fund, it is time for you to focus your attention on demolishing your student loan debt. In fact, this should never be put in the backseat. Before you commit to a home loan or a car loan, you need to seriously pay down your college debt first.

Here are 5 things that you need to know to help you pay off your student debts.

  • Know your loan. Find out how much you owe and who you owe it too. Keep track of everything especially when you have a lot of lenders. You do not want to get confused and fail to pay one lender.

  • Know your finances. You need to review your budget and find out the maximum amount that you can use to pay your monthly student loans. Remember that you need to pay more as much as possible. A college debt payment usually goes to the late charges, then interest rates and last on your principal debt amount. If you pay more than the required amount, you get to eat up a portion of that principal amount.

  • Know your options. It is also important to know your payment options like the pay as you earn or income based repayment plan. You will know more about these options if you visit Make sure you get a repayment plan that your current income can afford.

  • Know your rights. If you landed in the right industry, you may be qualified to avail of the Public Service Loan Forgiveness program.

  • Know where to get help. Being a new graduate will make you feel disconcerted at some point when it comes to your finances. This is the time when hiring a professional to help you out can really make a huge difference in your pursuit to pay off your college debt.

If you need any assistance with your student loans, National Debt Relief has a federal student loan product that provides consultation services to consumers who are burdened with college debt. This service includes the analysis of the consumer’s financial, student loan and employment situations. The company will then advise the consumer on what program they are qualified to use to pay off their debts faster. The service includes assistance in preparing the documents that will help borrowers enter the appropriate program. The service charges a one time flat fee that is secured in an escrow account. National Debt Relief will not withdraw this amount unless the consumer is satisfied with the paperwork done on their behalf. This performance based payment means that if the consumer does not get into a program, the company will not get paid. There is no maintenance fee or any upfront fees to be charged to the consumer.

How To Prepare For School Year 2014-2015 College Costs

books with a mouseWere you aware that college costs rise faster than the inflation rate? The increase of higher education costs rose to 4.8% in 2012 – more than double of the inflation rate that is only around 2%. This is the reason why a lot of students are thinking about skipping a college degree to avoid the inevitable student debt. Some of them opt to go straight to the blue collar workforce that will give them a lower income – but will keep them from the bonds of debt.

As the overall student loan balance rises, you may be wondering about the future of college education. Will it still be worth it to be in debt during the first 10 to 15 years of your work life for a chance to earn more monthly income? Apparently, some colleges want you to think so.

Before we can throw stones at these heartless college institutions for continually raising tuition fees, you need to read the 2012 article from the Associated Press website.

According to the AP Big Story, there are some colleges who have heard the cries of the student population and are willing to provide them with a bit of reprieve. Some of them offer a tuition plan that will freeze their rates for 4 years. These fixed-rate tuition fees will allow families to budget for their student’s school expenses. Others went a step further to offer a lower fee for the school year 2012 to 2013. The total number of colleges who did this in the last school year involved 320 universities and colleges all over the country.

The main benefit of having a fixed tuition is the student gets to analyze and anticipate their overall college costs. By having a figure to target, they will know how much they need to raise to add to their savings. They should be able to decide whether they need to get a student loan or getting a part time job will help pay for the shortage.

The real cost of getting a higher education

Whether you are an incoming college student, coming back for another year or going to a graduate school, the first step to prepare financially is to understand what you are paying for. Do not just accept the amount that the school will give you. It is very important that you do not rely on the myths of college costs and you should scrutinize what you are paying for in school.

But what exactly is the real cost of going to college? More importantly, why does it cost a lot of money to get a higher education?

In 2011, Richard Vedder, a professor of economics in Ohio University and the director of the Center for College Affordability and Productivity released an article through the CNN website. Together with Matthew Denhart, the Center for College Affordability and Productivity administrative director, he discussed various issues that makes college very costly.

The article published through the provides the following insights about college costs.

  • The country’s higher education structure needs a reform to address the rising cost to go to school.

  • Colleges and universities lack the incentive to improve administrative processes to help lower their overhead cost.

  • A college or university president is viewed to be successful if they take care of the needs of the faculty, alumni, trustees and key administrators or politicians. This makes them prioritize earning more off the students through tuition fees than to make sure more students can enter the school.

  • Some of the Ivy League schools are trying to be “selective” to raise their status as providing the best education. They turn away qualified students so their elite status can allow them to raise their tuition fees.

  • Since the faculty is important to the education of the students, schools bribe them with high salaries and low teaching tasks.

  • The alumni that provide the school with some funds are appeased through intercollegiate athletic programs that bring pride and bragging rights for the school. These programs are oftentimes very expensive.

  • The presence of student loans do not help regulate the prices of the schools. Since students can borrow money anyway, there is no need to make schooling more affordable.

  • Students must learn how to measure their chances to earn profit against the tuition they are paying to get that privilege. It has to be measured in accordance with the industry their degree will fit into, the overall job market conditions and the rising cost of living.

  • A more transparent way of college spending must be enforced so schools will be more cautious of how they spend their money.

  • College tuition fees cannot rise faster than the income being offered by the corporate world.

These points help shed light to the many improvements that must be implemented to make college costs more affordable. Obviously, the need to get education is there. We just have to work on reforming the current system.

How to save a couple of hundred a month to help finance college expenses

While there is nothing that we can do at the moment to lower college costs for the next school year, the task is left to the students and their parents to make college more affordable. Here is a video from CNN where Christine Romans provide a helpful advice to keep student loan debt down.

You really have to take seriously the bad effects of student loan debt. You want to make sure that you save up enough money to help finance it. If you are still in high school or you have a child that is about to go to college, you can target to save a couple of hundred dollars every month to add to your college fund. $100 every month will help save you $1,200 a year. $200 will save you $2,400 and so on as so forth.

Here are some tips to help you save up for college costs.

  • Bundle your cellphone plan. Some companies will provide you with an all inclusive plan on your phone that will provide you with unlimited calls, text and even Internet access for only $40. This will save you $60 a month since usual cellphone fees amount to $100 a month. That can save you $720 a year.

  • Let go of your gym membership. The average cost of a membership is $10 a month. Although this is a small amount, it is still $120 a year. You can jog or use the community gym to get in shape.

  • Do your own nails. The average cost of a manicure and pedicure can amount to $25 to $30. If you get one every week, that can cost you $100 to $120 a month. If you learn to do your own nails, you can save up to $1,440 a year.

  • Be cautious about using a card for purchases (even debit or ATM cards). The average charge is $2.60. If you swipe your card once a day, you waste $18.20 a week. That is $72.80 a month. If you use cash instead, you can save up to $873.60 a year.

  • Get rid of the cable. A cable subscription can cost you $100 a month. That is $1,200 a year. If you have an Internet connection, just opt for this and let your cable go.

If you do all of these saving tips, you can slash $362.80 from your bill. That can total to $4,353.60 savings a year. If a parents starts to save for their childs tuition when they start high school, the 4 years before college can help them save up to $17,414.40 before they go to college. With the average student loan amounting to $24,000, you only have a few thousand to finance. The $7,000 can be something that the college student can earn by doing part time jobs.

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