Why You Should Start Paying Off Your Student Loans Before You Graduate

Student Loans

Did you know that the average debt for college graduates is over $26,000? What about credit card debt? That number is around $15,000. These numbers are staggering, considering the amount of the interest that is added on to them. 

I want to share with you what I did to keep college costs down, and why I decided to start paying off my loans before I graduated. No, I am not entirely debt free as of 2016, but I am not stressed about my loans, and it won't take me 15 years to pay them off either. 

I want to share my story on how I made some of the college decisions, including the good and the bad, and how it has affected me today. What I share may not work for everyone. You might not like some of my advice. I know I didn't (at least in the beginning). So what was the first thing I did while I was a senior in high school?

I made college finances a priority in selecting which college to attend.

I have to be honest, I didn't do this entirely willingly. I was applying for colleges back in 2010, and thought that Loyola University in Chicago was the perfect school for me. I spent hours perfecting my application and scholarship essay. It paid off (in the initial stages anyway). I received a $40,000 scholarship from Loyola. I was ecstatic - My 18 year old self was very naive and thought surely that this amount of money would guarantee me a happy college life that was debt free! 

Then reality struck.

My parents pointed out that this scholarship did not cover out-of-state tuition, living expenses, or residing on campus for the first year. I don't remember the exact numbers, but I would have paid $60,000 to $80,000 in addition to the "free" tuition. That was crazy to me! I had no concept of what $60,000 was worth. I never once thought about living expenses; Chicago is one of the most expensive cities in the US after all. So it was a difficult decision, but I had to decline Loyola's admission letter. It was one of my most disappointing moments in my life. I thought my college career was over before it had already begun.

But I got over it. I started looking into universities within my home state. 

The university I found wasn't perfect. But it fit my interests and needs at that point in my life.

Here's an important thing to remember about college: the possibilities are endless! There is no shame in choosing a community college to earn an associate's degree first. There is no shame in taking 4, 6, or even 10 years to finish your education. There is no shame in choosing a university that's in your hometown. There's no shame in switching universities. Everyone's story is different. Learn to embrace yours.

Even though this school was my last choice to attend for the next four years, it seemed silly to go anywhere else. Why? Because when I was 18, I had NO IDEA what I even wanted to study! Could you imagine how ridiculous it sounds to attend a private university two states away from where I live, that costs $40,000 a year, as an undecided major? All I can say is, I am relieved I listened to my parents even though I was entirely disappointed in doing so at that point in my life.

Since I chose a public university, it was relatively "cheaper" than a private institution. I also received a scholarship that fully covered tuition. For the first two years of college, I owed about $1,000 per semester for additional fees. 

Unfortunately I still made a huge mistake that so many students and their parents make.

During my first year of college, I decided I had to live on campus "to get the full college experience." Now many students have no choice but to live on campus, but most households live within driving distance of some college or university, so it's possible to avoid. The loans I am paying off now are from my freshman year of college. That's right, if I had decided to live at home for 4 years, I would have been free of student loans. At that point in my life, I was convinced that I had to go all or nothing to experience the whole package deal. 

There are dozens upon dozens of other ways to get the "full college experience" while living at home! Joining two or three campus organizations is more than enough to get involved, gain valuable experience, and form lifelong friendships with people that have the same interests as you. 

If that doesn't seem like enough, here are some other options:

  1. Get a job or find an internship on your campus.
  2. Attend events that interest you. There's a good chance you will come across free food or receive a free t-shirt.
  3. Go to sporting events. Those are probably free too! (With your student ID.)
  4. Work out at the campus gym. Again this should be free too!
  5. Hang out at the library with a study group or focus on your five page paper. (If you're a huge procrastinator, good luck.)

The point I'm trying to make is this: there are plenty of ways to have fun in college without spending thousands of dollars in the process. 

Now that I have covered some ways to save money through some simple decisions, I want to point out how to earn money going to college. 

Keep seeking out scholarships all four years of college. Don't stop after your accepted your admissions letter!

Because of this, I won several scholarships. I was paid nearly $3,000 dollars during my senior year! (That was after I paid tuition and all other fees.) I was most successful with focusing on state scholarships and local scholarships. There are scholarships that you will qualify for based on your GPA, your major, what organizations you participate in, what county you live in - the list goes on! I almost made the mistake of thinking that some of them weren't my time. They were only worth $250-500 after all. However, those scholarships tend to be less competitive, and that money adds up quickly!

There is one last factor that helped keep my debt down, and payable after I graduated. This might be the least likable aspect to consider but hear me out.

Start paying off your loans BEFORE you graduate.

Yes, I know. That's a doozy! I am not saying you have to pay it all off. I am not saying you have to work 40 hours a week while in school. What I am saying is, pay off what you can afford, and make it a monthly effort. Sometimes I only paid $10 a month, and other times I paid as much as $75 a month. 

This has saved me several hundred dollars in interest. Also the Federal Government "rewarded" me for paying off my loans consistently by not making a minimum payment required until nearly 10 months after I graduated. It was such a relief when I was still looking for a job! 

These are all simple steps to make life a little easier after you graduate.

You will be doing yourself a huge favor if you save yourself money NOW, and pay off your debt as soon as possible. I cannot encourage this enough; think about financial responsibility now, and your 20s will become that much more enjoyable.