Student Loans: Borrow as Little As Possible

It is true that in the realm of debt, student loan debt is not considered “bad.” When you go to repay your debts, the fact that student loans are usually low interest and fixed rate (if you have consolidated them) means that you can leave them to the end of your debt repayment plan. On the other hand, debt is still debt. It is very easy for “good” debt like student loans to go bad.

Borrow as little as possible for your education

You can protect your financial situation after college by borrowing as little as you can. Efforts to get scholarships and to save up money ahead of time (a 529 plan or a Coverdell can be good moves), and even to get some sort of a part-time job, can help you limit the amount of money you borrow for college.

Another thing you can do is carefully choose your college. Just because you can get in somewhere expensive doesn’t mean that you should go there. Many state universities offer a fine education that can take you far. The fact that I went to Southern Utah University to save money didn’t stop me from getting accepted to a good masters program at Syracuse University (I even got a partial scholarship). It’s all about weighing the value.

Your education is an investment. But like all investments, there is a risk of loss. Borrowing a great deal to finance this investment could come back to haunt you in the end.

Image source: Cory Maylett via Wikimedia Commons