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I have two main goals with this blog.  The first is to inspire those who have student loans or other forms of debt to live below their means so that they can pay off their debt as quickly as possible.

The second goal is to reach those who are currently in college or will be heading to college soon.  Many young people believe that attending college immediately after high school is the only path to success.  If their parents can’t afford to help them pay for college, they often think student loans are their only option.

If you are considering taking out student loans for college, please reconsider.  If you know someone else who is taking out loans, send them this article.  Student loans are NOT your only option.

You do not need to begin your adult life buried in debt.  Believe it or not, it is possible to complete a degree program with minimal amounts of debt or even no debt at all.  (Here’s how my friend Neva did it).

Don’t do what my husband and I did.  I finished grad school with $75,000 in student loan debt and my hubby finished college with $42,000 in student loans.  Together, we had $117,000 of debt to start with.  Our combined monthly payments were as high as a mortgage.

The truly scary thing is, it could have been worse.  We made a lot of stupid choices with our loans, but thankfully, we also made a few good decisions.  If we had made only dumb choices, we could’ve easily finished school with debt north of $200,000.

Here are five dumb things we did with our student loans (don’t do what we did!)…along with the few smart things we did.

Private College

My now-hubby left his hometown in Iowa to attend a private, for-profit college in Minnesota.  Neither of us can regret this because if he hadn’t moved to Minnesota, we never would have met.

Still, the amount he was paying for a sub par education was insane.  He was deeply disappointed with the school and felt it was run more like a business than a college (a common problem with for-profit colleges).

After a year at that school, he changed majors and transferred to a public school.  This saved him an enormous amount of money.

I also almost ended up at a private college.  During my senior year of high school, I applied to three universities – one was public and the other two were private.  The private colleges were about double the cost of the public one, but I was offered 50% scholarships to both private schools.

It seemed the cost would even out, and I could choose whichever school I wanted…until I asked the admissions officers one important question: If tuition increased each year, would my scholarship also increase?  The answer was no.

Going to a private school wouldn’t have been any more expensive during the first year, but it would cost more during my second, third, and fourth years of college.  I decided to go to the public school (unfortunately, the school is one of the most expensive public colleges in the country).

Living on Campus

Schools push like crazy to get students to live on campus.  It is not because they truly care about your social life or want you to have the best college experience possible.  It’s because they can make a boatload of money when they cram as many students as possible into tiny dorm rooms.  I paid about $1,000/month to share a room the size of a closet with three other people.

It seems completely insane looking back on it.  Luckily, I came to my senses during my junior year of college and moved back in with my parents.  Living off-campus was less convenient (by bus, it was about a 60-90 minute commute each way), but it was definitely worth it.

If I had continued living on campus during my last two years of college and both years of grad school, I could’ve easily accumulated another $40,000 in debt (or more).

Maxing Out Loans

My hubby lived on campus every year, and he maxed out his student loans each year.  Needless to say, this a very bad idea.  IF you have ANY student loans at all (and I don’t recommend having any), these should be used only for tuition and textbooks.  Using loans to pay for an apartment, a car, food, and other expenses will cause your debt load to skyrocket.

Using Loans as an Emergency Fund

Every year, when I had to decide exactly how much to take out in loans, I did something really stupid.  I asked my parents for advice.  It never even occurred to me to seek financial advice elsewhere.

Their answers were always the same.  My mom suggested that I max out my loans (“you’re not going to have enough money if you don’t!”), and my step dad told me to only take out enough to cover tuition.

My step dad’s advice was smarter (obviously), but I worked part-time at a job that paid minimum wage.  I didn’t have enough money to cover my basic expenses.

The smart thing to do would’ve been to take a break from college, work full-time for a while, and then go back when I had enough money.  Instead, I never maxed out my loans but I took out a couple thousand extra in loans each year to keep in savings as an “emergency fund”.

I was afraid of running out of money and that money was there “just in case”.  It didn’t occur to me that my “emergency fund” would be collecting compound interest for the next several years while I was in school.  I didn’t realize that using debt to avoid having debt (getting a credit card) made no sense at all.

Assuming Grad School > An Undergrad Degree

By the time I realized I wanted to major in HR instead of psychology, it was a bit too late to change my major.  I decided to apply for a master’s degree program in HR.  The business school at my college was extremely competitive, and I had naively believed that getting a master’s degree from a prestigious school would make it worthwhile to take on even more debt.

I never even considered getting a certificate or a two year degree in HR.  I already had a bachelor’s degree, so I thought getting an advanced degree was the next logical step.  An associate’s degree might have seemed odd at that point, but it would have been MUCH cheaper.

What You Should Do

If you’re taking out student loans right now, you probably think you don’t have any other options.  It’s what everyone does, right?  How else are you going to pay for school when you make $8.00/hour working part-time as a barista?

Here’s my advice: work for a while, live at home if you can, and save up as much cash as possible.  Then, get an associate’s degree.  If a bachelor’s degree is required in your field, get one if you can pay cash for it.  If you don’t have enough money yet, wait until you do.

If you end up taking out any student loans (which I do NOT recommend), minimize them as much as possible.  Go to a public school, live at home, and only take out the bare minimum in loans.  Make smart choices now so you don’t have to make sacrifices later.

It may not be easy, but you’ll be thanking yourself later…when all of your friends are struggling with debt they can’t afford to pay back.

*For those of you who already have student loan debt, read How to Ditch Your Student Loans With the Debt Snowball.

Do you have student loans?


Other stuff you might like:

My Personal Finance “Aha” Moment
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Why I’m Grateful for My Student Loan Debt
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Personal Finance Resources:

The Total Money Makeover by Dave Ramsey
YOLO: The Roadmap to Financial Wellness and a Purposeful Life by Jason Vitug
Smart Women Finish Rich by David Bach
It’s Only Money and It Does Grow on Trees by Cara MacMillan

Blogging Resources:

How to Blog for Profit Without Selling Your Soul by Ruth Soukup
365 Blog Topic Ideas for the Lifestyle Blogger Who Has Nothing to Write About by Dana Fox
ProBlogger: Secrets to Blogging Your Way to a Six Figure Income