- Personal Finance»
- Paying for College
Coping with Student Loans: Taking Community College Courses to Stop Interest and Payments
The Problem of Student Loan Debt
For a undergraduate student at a private university with no financial aid, it's fairly easy to rack up $120,000 plus in debt--just in tuition. While private school is cheaper, students still find themselves with large amounts of student loan debt after graduation--and should those students decide to pursue a graduate degree, the debt burden becomes even more crushing.
It's easy to say, "Oh, well the student should go where he/she gets a scholarship" or "Well, the student will get a job after graduation and easily pay that amount back"--but an eighteen-year-old can't be expected to fully grasp the enormity of over $100,000 in debt, and it's a hard lesson to learn when you're twenty-two-years-old and have to move back in with your parents to make ends meet. And with the current economy, there's no guaranty that the student will ever get a high-paying enough job to make full debt payments and also be able to eventually afford a house and a family.
There are solutions, however, and this article addresses one in depth!
Solutions to Student Debt
Once your loans enter repayment, you may be staggered by the monthly payment amount--and you may not be able to meet it. Of course, loan servicers offer forbearance options--but the interest keeps accruing. You can also choose Income-Based Repayment, where the payment amount is based on your salary--but again, the interest keeps accruing, and you'll end up paying way more in the long run.
The best case scenario is to live cheaply and pay the loans off as quickly as you can, and there's something you can do to speed along the process that not many graduates look into: attending community college.
Do you struggle with your student debt payments?
Enrolling in Community College as a Student Debt Solution
Wait, you may be saying, I already have a degree--possibly a graduate degree--so why would I want to attend MORE school? The answer is simple: when you are enrolled at least part-time in an accredited community college, your loans go into deferment--that means payments suspend and the government starts to pick up your subsidized interest payments again.
If you have a full-time job and time for at least two classes (which you can take online at most community colleges), then you can continue making your payments with less interest.
Strategy for Student Loan Payments While You're In Community College
If you're thinking about enrolling in community college to stop your student loan payments and subsidized interest, first call and confirm with your loan servicer/provider the number of hours that will count as part time. Once you've done that, start researching community colleges and pricing. You'll want to go to a community college within your county to get the cheaper in-county tuition, and also don't forget to factor in how much books/materials will cost.
Before you register, do some math--confirm that you will not be paying more in tuition/books than you are in subsidized interest. If you're going to come out ahead, then go ahead and sign up! Try to pick classes that will further some interest or relate to your job in some way--community colleges offer not only the basics of English, math, etc., but also skills classes in Excel, Access, programming, and more.
Once your loans go into deferment, continue to pay--don't take it as permission to go on a spending spree! Focus your payments on the loans with unsubsidized interest--if you can pay those down over the course of several semesters, you will be in a much better position on your road to being debt-free.
Student Loans: Don't Major in Debt
Student Loan Repayment Options
If you're struggling to repay your student loans, it may seem overwhelming even with all the options available. Community college is one option to to freeze your payments and subsidized loan interest, allowing you to pay down your unsubsidized loans more quickly. As an added bonus and benefit, you may even enjoy the college classes and learn new skills!