More Students are Borrowing Less for Education and Training Beyond High School

A recent survey by Sallie Mae and research firm Ipsos found that more students are making shrewd borrowing decisions for their education. This year, the amount of money borrowed for college dropped to its lowest level in several years. More parents and students are opting to pay for college using their savings rather than with loans. By avoiding student loans, families are able to save themselves thousands of dollars in interest in the long-run.

Avoiding student loan debt is not easy, as the cost of attending college continues to rise. Surveys have shown that students are managing the growing cost of higher education by going to less expensive colleges. In the past four years, the number of students attending two-year community and junior colleges has gone up by 11 percent, while the number of students entering four-year universities has decreased by 11 percent.

Community and junior colleges are a great money-saving option for families, as they charge less for tuition. While the average four-year private college costs over $34,000 a year, a two-year public institution costs about $11,000 per year on average. Two-year public colleges are usually located close to home, and offer transferrable credits for those who want to move on to a four-year degree. You do need to make sure the credits you get at a two-year institution will count when transferring to your particular four-year institution, as they might not. Doing the research beforehand will help prevent wasted credits (and money).

School choice is not the only way students have been cutting their dependence on loans. Students and their families have also worked to reduce the living expenses that usually contribute to debt. Rather than living in pricey dorms, more students are choosing institutions that allow them to live at home. Other students are working while in school in order to contribute more money toward their education.

Students entering college should take advantage of this trend and explore ways they can limit their dependence on student loans. When researching potential colleges, pay close attention to the yearly costs, and do not neglect to inquire about the community colleges in your area. In order to save on living expenses, consider schools that will allow you to live at home. If you do choose a four-year institution, consider one that will not charge you out-of-state-tuition. These cost-cutting decisions will save you a great deal of money over time.

READERS, what do you think?

Would you be willing to go to a community college if it meant avoiding student loan debt? Why or why not?

Reference:

Hicken, M. (2014, August 1). How Americans Are Paying for College. CNN Money. Retrieved from http://money.cnn.com/2014/07/31/pf/college/paying-for-college/index.html?iid=SF_PF_River.