Ideally, college graduates will earn more than less-educated professionals. However, college education is expensive and students often need to apply for a loan. Student loan is often seen as a sound financial investment, but it can be disturbing how young adults would start their career while being burdened by a huge debt. It can take them years or even decades to repay student loans. This could postpone other essential expenses. Young professionals may need to live in rented house or use public transportation, before they can afford to apply for a mortgage and car loan. In some cases, they also need to postpone their wedding, which is also a costly expense.
In this case, it is important for students to get more bang for their education buck. It is essential for them to look for proper financing options. It may make sense to spend an extra dollar for education, but we should also be aware that we will need to pay for interest, which is higher than the rate of inflation.
Many young college graduates start with low position jobs that could provide with them with around $45,000 annually. This can be rather low, especially because colleges graduates will need to repay for the loan. Some graduates solve this problem by living with their parents for a few years and looking for jobs in their hometown, so much of the salary can be directed toward repaying for student loans. However, this situation won’t apply for everyone.
Graduates who live in small towns will need to move to much bigger cities to get a job and this will also mean higher expenses. They will struggle to pay the rent and repay the loan. This is a fact that many college students need to be aware of. They should look for ways to minimize the amount of student loans by looking for additional funding sources, such as grants and scholarship. They could also provide specific services during their time in the college, so their revenue can be used to cover a portion of the tuition fee. Students should be aware that they may need to start with jobs that have relatively low pay scales.
By taking proper steps, students could prevent going deeper into debt when they graduate. Spending more for any kind of education doesn’t guarantee a better start. In fact, it is still possible to succeed, if we choose more affordable schools, such as state colleges. Costs we spend during college life can be mostly considered as consumption, instead of investment.
Only tuition fees and textbooks that can be considered as real investments, others such as food, transportation, clothing, entertainment and accommodation are consumption. So, it can be a good idea to choose colleges in our hometown to significantly reduce costs and perhaps even avoid applying for student loans. By making proper decision, students will be able to have a much better start, perhaps even better than graduates from top-ranking universities.