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Back to School Edition – Avoiding Unnecessary Student Debt

With the Fall 2013 semester underway, having a discussion about ways to avoid unnecessary debt is now more prudent than ever.  The modern university student has been saddled with financial burdens that older generations often fail to comprehend.

In fact, a recent survey of college pricing by the College Board found that a “moderate” budget for an in-state public college for the 2012–2013 academic year averaged $22,261, while a “moderate” budget at a private college averaged $43,289.  It’s important to remember that you’re investing in your or your child’s wellbeing, and that, like any investment, you should do it smartly and with a measured hand.  The following are some tips for college age students looking to avoid unnecessary debt:

1) Spend some time researching your textbooks

One of the major costs new students often forget to account for is that of their textbooks.  While it’s easy enough to think, “they’re just books, how bad could they be?” the shock sets in when you start to see the total skyrocket hundreds, even thousands of dollars for some majors.  So the first and foremost rule of textbook buying is: don’t be afraid of used copies, they’re often in great condition and sold at significantly lower prices.

To go a step further, rather than waiting until the day before your first class to find your books, spend some time searching the internet for cheaper copies (even just a cursory Amazon search will often save you a significant amount of money), or look into textbook rental programs in your area.  And for those students out there saddled with the burden of a brand new edition of a textbook, don’t be afraid to ask your professor if the newest edition is absolutely necessary and if the changes are imperative to your understanding of the class (they know textbooks are expensive, and students are on a tight budget).

2) Credit cards are your enemy

While it may sound cliché, many students simply do not know how to save money.  Going out every weekend, not buying generic brands, and those daily lattes at the student union slowly but surely ad up, and all too often students turn to credit cards to delay the growing debt (in fact, as much as 84% of all students had a credit card in 2009 according to a Sallie Mae study).

It’s important to remember that after getting the best education possible, saving money should be a priority in every student’s mind.  The last thing you want to do after graduating is look back at all you’ve accomplished only to be crushed by the dual burden of interest payments on student loans and credit card debt.  It’s crucial that students only spend money they have, and learn the importance of managing a budget before they find themselves tasked with it in the real world.

3) Look into taking general-education credits at cheaper, local institutions

While this solution might seem drastic to some, the savings for new and incoming students are very real.  Needless to say, the difference in cost between a prestigious, well-known university and a community college or technical school is astounding, but credits for many gen-ed classes will often readily transfer between schools (after all, introductory math, science, and humanities classes are usually based on widely available material) and the savings can be extreme.

With that being said, it’s important that students check that both schools will honor credits before establishing a long-term plan that includes transferring said credits.  But with keen planning you could save yourself thousands of dollars while still graduating from the school of your dreams.

Finally, although more studying is probably the last thing you’d like to do during your college years, consider taking a basic class on personal finance and budgeting at a local community college.  It’s unfortunate that these practical topics are not better taught in pre-college years as they would create graduates much better prepared for the often harsh reality of the real world, where every penny spent on credit does eventually come back to hunt you (in dollars not pennies).