Most 18-year-olds skipping merrily off to college have no idea of of the financial turmoil that awaits them after graduation — if they’re part of the one-third of enrollees lucky or dogged enough to get their degree.
Federal student loan debt rose to over $1 trillion in 2012, and the government compassionate enough to lend young kids all of that money dispatches debt collectors from 32 different agencies to keep them paying off the interest on time each month. Can’t afford the monthly payment? That’s a shame. If you stop paying on your loans, the interest is capitalized, dragging you deeper in the hole. (RELATED: Federal loan sharks prey on cancer patients filing for bankruptcy)
If you plan to attend college full time, take steps to secure your financial future. Don’t wake up with a hangover and a pile of bills on graduation day — use this list to reduce the amount you borrow for a degree you almost certainly can’t afford.
SCHOLARSHIPS: Tens of thousands of dollars go unclaimed each year — grab some of the free money floating past you and pay off a semester a grant at a time. Let your mentors know which scholarships you will apply for and when ahead of time so they have plenty of time to send in recommendation letters. Begin searching for opportunities in January, when most new applications go online; make an agenda with deadlines and send in your materials as soon as possible. Call local businesses and ask if they sponsor promising students headed to college. Check the sites of major corporations, too. Coca Cola gave out $3 million to 250 high school seniors every year since 1989, which adds up to a decent $12,000 per kid. Your parents’ employers may also offer scholarship opportunities. If you’re an athlete, search for the college recruiting service that best fits your plan. Conduct your searches on a yearly cycle, and rake in the cash while you still can. Write a poem, win 15 grand — easy money.
FELLOWSHIPS: Before you knock off a few thousand off your bill with miscellaneous scholarships, look for the big money. Many organizations will funnel you a steady stream of dollars by providing grants for students excelling in certain fields of study, and may guarantee post-grad employment if you meet their standards. A fellowship in the humanities is especially valuable, considering that salaries for its corresponding jobs tend to be lower than STEM-related occupations. Looking to use your political science degree to further a free society? Apply for George Mason’s Institute for Humane Studies Humane Fellowship, a non-residential program that pays up to $15,000 per year while initiating you into a professional networks of scholars. You can also take advantage of big government by taking its money: The State Department will pay up to $40,000 per year for students enrolling in the Thomas R. Pickering Foreign Affairs Fellowship. Look for institutions dedicated to specific causes willing to stick with you for all four years. Add in tuition discounts from your college for academic excellence, and consider a fellowship a double coupon.
STANDARDIZED TESTS: Now, consider shortening your stay on campus. Get your core class requirements out of the way by taking a battery of Advanced Placement tests before you enroll. Why waste months languishing in Calc 1 when you can take an AP exam your senior year and earn credit for it before setting foot on campus? Front the money for as many tests as you can — they cost $89 a pop, and The College Board may lower that to $45 for qualifying students — to save thousands on rehashed college classes and to begin taking the interesting, advanced courses right away. Consider taking CLEP tests as well to earn credits for what you already know, and to fill in gaps left by unavailable AP tests. CLEP test costs are comparable to AP tests. Use your high school graduation party windfall wisely to defer the cost.