For most people, college not only shapes the future but also produces fond memories. However, this is not to say that there are no challenges. While each student has unique experiences of college, there are problems characteristic to college life. The most prominent of these is student debt. Without proper planning, student debt can compromise the value of investing in education by bogging down a student to years of repayments. Some of the ways that students can handle the issue of debt is by understanding student loans, financial planning, and working part time.
Debt accruing from high tuition, textbooks, housing, food, transport, and other supply costs is a significant problem for college students. College students rely primarily on heavy borrowing from federal and state programs to finance their college education. Students that overlook the high costs of student loans often end up being faced by substantial debt after graduation. For example, data from the year 2019 indicates that federal student loan debts amounted to over $1.5 trillion (Kantor 1). Arguably, the problem of student debt has grown in magnitude due to rising trend of falling state and federal funding accompanied by steadily rising tuition costs.
Overcoming the problem of college debt, requires first and foremost a detailed understanding of student loans. Given the ready availability of student loans, students tend to ignore details such as repayment provisions and timelines. A detailed understanding of student loan structure forms the basis for choosing the right package. Different forms of student loan packages are available to individuals depending on certain demographic characteristics. For example, financially needy students have access to subsidized loans which unlike unsubsidized loans offer interest grace periods and deferments (Studentaid.gov 1). Similarly, some student loans allow for interest only payments when still in college which could potentially reduce the debt burden.
Financial planning in the form of detailed personal budgeting is the second technique to overcome student debt. The burden of tuition costs, while significant, is made worse when students incur unnecessary costs such as impulse buying produced by sensation seeking (Bajtelsmit 1). Developing a realistic personal financial plan to guide spending can instill a sense of discipline and sacrifice that would lighten the debt load after graduation. For example, it would be prudent for college students to avoid the temptation of using credit cards. Credit cards exploit the need to offset cash demands with resources not presently available. This availability to make financial commitments with future resources creates room for impulse spending further complicating the student’s financial future.
Finally, combining work and study can potentially reduce the burden of student debt. Admittedly, part-time work can inadvertently introduce the challenge of allocating inadequate time to studies as well as depression due to fatigue and loss of social interaction (Nicklin, Meachon, and McNall 1267). However, colleges have work-study arrangements that take into consideration the full needs of the student. Joining these programs can provide a valuable source of finances to cater for needs that would otherwise require debt financing. Students can also pursue off-campus jobs on a part-time basis or work summers which in addition to availing money would promote learning in personal finance planning.
While college students face a myriad of problems, student loans are the most prominent issue. The financial demands imposed upon college students compel them to rely on state and federal education funds that later compromise their financial status. Furthermore, the failure of higher education to guaranteed a high income job means that students may end up trapped in a cycle of debt. Understanding the requirements that accompany student loans as well as financial planning and part-time jobs are among strategies that carry the greatest burden in overcoming student debts. Most importantly, this discourse brings out the need for a national conversation revolving around the need to address the ever-rising tuition costs.
Works Cited
Kantor, Alice. “The $1.6tn US student debt nightmare” Financial Times, 27 December 2019, https://www.ft.com/content/0af6a04c-1881-4969-93d0-a943673ac4f2
Nicklin, Jessica M., Emily J. Meachon, and Laurel A. McNall. “Balancing work, school, and personal life among graduate students: A positive psychology approach.” Applied Research in Quality of Life 14.5 (2019): 1265-1286.
Studentaid.gov. “The U.S. Department of Education offers low-interest loans to eligible students to help cover the cost of college or career school.” Studentaid.gov, 2019, https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized
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