But the new law only addresses the borrowing rates, not the strangling cost of a college education. Joan Jensen, president and CEO of Central Credit Union of Illinois, came into our ABC7 studio to offer money-saving strategies for college students.
1. Lessons learned from recent college grads
- A college degree has no guarantees.
48 percent of recent grads who are employed are working in jobs that do not require a college degree.
- Two thirds of 2011 grads left school owing more than $26,000 in student loan debt.
- Almost a third of all federal student loan borrowers have experienced trouble repaying their loans.
2. Develop a plan to minimize student loan debt
- Choose less expensive schools.
Attend a junior college for your first two years. Then, transfer to a state school.
Avoid higher-cost private schools if you need to borrow more money to attend them.
- Be a commuter student.
Live with family members.
- Put yourself on the 4-year plan if you are a full time student.
Taking five years or more to graduate will rack up significantly more debt.
- Choose a major that provides good employment options.
STEM majors-science, technology, engineering, and math can offer good employment options.
Other courses to consider are business writing, finance, and accounting.
- Give yourself a head start.
Earn AP college credits while you are still in high school.
- Search out scholarships, grants, internships, and work study programs.
- Live frugally.
Avoid credit card debt.
Minimize entertainment, travel, and other optional expenses.
3. If you do borrow, consider federal educational loans.
They usually cost less than private loans and offer more repayment options.
Go to studentaid.gov to learn more about federal educational assistance and how to apply.