Jan 02

Avoid Student Loans Like the Plague

student debt survivor slave

Last week, I received a comment from reader, Jim, with a question about how his son, an aspiring attorney, can keep his student loan debt to a minimum. Here’s Jim’s comment:

Our son graduated in May, 2012 and wants to start law school in the Fall of 2013. We’re trying to pay off our house and fully fund our retirement and are not in a position to help him with law school tuition. He’ll be working for the next several months, living at home and saving every dime he makes for law school, but that will hardly be a drop in the bucket. Any suggestions on how he can keep his student debt to the lowest possible amount? We paid all his expenses in undergrad and he hasn’t got a clue what student debt means. Thanks.

I tackled the first part of Jim’s comment in a post I titled: Our Son is Clueless About Student Debt-Help! The second part of his question/comment about avoiding student loans will be addressed in this post. So without further ado, here are some of the ways to keep your student loan debt to a minimum. Some of these I followed closely when I was a student, and others I wish I had known about before I got myself into 30K of student debt.

  • Live at Home: If your school is close to your family, stay with them. Housing costs can get out of control quickly. If you can’t stay with family, get roommates (many roommates) and live in the most affordable apartment you can find.
  • Negotiate Financial Aid: Little known fact, you can negotiate financial aid with your university. When I got into two graduate programs, I told program A that program B (the number 3 ranked school in the country for my specialty) offered me a better scholarship. Program A immediately agreed to match the scholarship. I never would have known if I hadn’t asked.
  • Special Programs: Ask about special programs offered at the school. A friend of mine worked for his university as an athletic assistant. He got a free apartment and free tuition while working for the university. It took him 1.5 years longer to complete his MBA, but when he graduated he was debt free.
  • Work: Schools will tell you that you can’t work and go to school at the same time, that’s BS. Get a job, better yet get 2. I worked multiple part-time jobs during both undergrad and graduate school and I didn’t die (nor did it hurt my GPA). In fact, I think I worked harder at school than many of my peers because I appreciated how hard I had to work to pay for my education.  Because I was able to pay for my living expenses out of pocket, I didn’t have to borrow additional student loans for housing expenses.
  • Ask about Scholarships: The financial aid office won’t be knocking down your door to offer you money. Ask about local, national, and income based scholarships at your financial aid office. Some of them might be small, but every dollar counts.
  • Take out the Smallest Loan: If you must apply for a student loan, calculate the very smallest loan you’d be able to take out and still be able to eat, have a roof over your head etc. They will likely offer you loans for double and triple the amount of money you actually need to survive. Don’t be tempted to take the money and “upgrade” your lifestyle or buy a new TV.

Remember if you live a lawyer’s lifestyle as a law student you’ll be living a law student’s lifestyle when you’re a lawyer. There aren’t any “secrets” to keeping student debt to a minimum. Hard work, frugal living, and smart spending are the best ways I know to keep student debt low.

What did you do to avoid or keep student loans to a minimum? What am I missing?

Image: VectorPortal


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  1. I think you pretty much covered it. Unfortunately law students are bound to have a ton of debt. Avoiding debt is great but I think most people need to realize that when you are done with school it’s time to start focusing on making as much money as possible, even if it means pursuing side income or working a second job.

    1. Very true, what you do after you graduate is as important as what you do when you’re in school/accumulating loans. If you don’t work hard once you’re finished you’ll be stuck with all that debt for years.

  2. Student debt can be a real drain on your finances for a long time. That’s why I worked 30-40 hours a week while I was a student so that I could pay for each semester as it happened. That way I finished with no student debt and was able to start life debt free.

    1. Wow, that’s awesome. Good for you! Proof that it can be done. I sure which I’d done the same.

  3. I had wonderful parents who paid for mine! Family loan at a low rate with a delayed payback – if your family can handle that sort of thing!

    1. Yeah, that’s not a realistic option for a lot of people. You were lucky, many people aren’t going to be that lucky.

      At least you have to pay them back. I have to admit, that’s a first in my book where people whose parents pay for their education are concerned.

    2. That’s great. My parents didn’t have the money to do that sort of thing, but if they did I’m sure they would have offered.

    3. My parents also helped me with college. They paid for what they could when I was in school, and helped me pay down the principal after graduation. Together, we knocked out about $55k in seven years.

  4. I had a similar question last week, and I suggested applying to scholarships like it was a part time job. Put in a few hours a day! Even if only a few get picked up, that could be tens of thousands!

    As for law school, some schools “require” that you don’t work the first year, so that could be a tough one.

    1. Great tip. Scholarships are so underrated and sometimes really easy to get. There were a few specific to my major and volunteering history that my high school offered that were practically guaranteed to me. I just had to fill out the forms and write a little essay.

      True about law school and working, I was thinking maybe of odd jobs, babysitting etc that would pay cash and would have flexible hours. But I never went to law school, so maybe it’s really not realistic to work with the courseload/reading that’s involved.

  5. I have a friend who is working her way through school right now without student loans. She has two part time jobs but it will pay off when she graduated debt free. It can be done!

    1. That’s exactly what I wish I had done. Good for her!

  6. All very good points. For my first college degree I lived at home and worked part-time. When I moved away to do my second one I still worked part-time. But the thing that made the biggest difference was working full-time hours during the summer break and working in a field that related to my education so that I had something to put on my resume when I graduated. That made a huge difference.

    I did read a blog a few years ago written by a University graduate. He made money while at school by offering tutoring to his fellow students in earlier years. He started it as a one on one program and the demand was so high that he turned it into classroom sessions on campus and made a ton of money.

    1. I worked full-time during summer breaks too. I made a pretty good chunk of money each summer doing so that I was able to use towards tuition and expenses. Smart go stay at home, wish my folks lived close to my school.

      Tutoring can be really lucrative if you’re a good teacher (patient and have a strong knowledge base of the field being taught). I did some reading and history tutoring for HS and middle school students when I was in college. It was a lot of fun and pretty good money ($20 an hour I believe). If you did it one your own and not for a company you could probably make more.

  7. Definitely look into special programs! Being a grad assistant saved me about $30K on my second Masters. Also, look for jobs at the school you’re attending so you can take advantage of Tuition Assistance Programs

    1. That’s fabulous! I wish I’d looked into programs like that before I went to grad school. Many schools let you take a certain number of classes for free if you work for them. It’s a great deal.

  8. I feel like I graduated college a million years ago but I would say living at home saves such a huge expense. The last thing you want to worry about while going to school is rent and how you’re going to pay for it. No matter how long it takes to finish school, this will save quite a bit in the long run.

    1. So true. The stress of loans after school is definitely worth living at home for a few more years.

  9. I would say that all of those tips are great. You have to at least try to do any one of the tips in order to minimize the amount of debt you will have. You are already down being a law student or med school!

    1. Try at least one, or maybe a combo of a few. I didn’t do all of these, (wish I had), but I did save a lot of money with doing just a few. If I hadn’t I’d probably still be in debt today.

  10. I went to a community college for my first two years and received a really good scholarship package to the school I transfered to. Of course, this is a private university, and I did not consider that the cost of tuition will be rising next year at least $5,000 while my scholarships will remain the same (unless I receive some new ones). I’m currently going into my second of five semesters and my student loan total for the year is about $9,000. Working two jobs barely allows me to pay living expenses and that is also with help from my parents.

    This can be scary (I’m a worrier by nature) but I absolutely love my school and am getting a very good education in my chosen field.

    1. My undergrad uni did the same thing. Same scholarship across 4 years. Thankfully the tuition didn’t go up that must in 4 years. It’s really all about choices. If you’re happy and you’re getting a good education, then you’ll find a way to pay off the loans when you finish. I’m a worrier too, so I hear you!

  11. I would tell a lot of people not to go to law school because they think lawyers make a lot of money. It’s often not the case.

    Only go to law school if you always wanted to be a lawyer, dreamed of it all your life, are 100% devoted to it. Not because you think you’ll make money but because you love the idea of practicing law, want to help people, want to help greedy corporations sneak by, whatever.

    1. lol want to help greedy corporations. I guess that’s true for some people, just sounds terrible. I would dare to venture that many lawyers don’t make the salary they thought they would when they entered law school. Unless you go to a top school, have connections to get into a good firm, and/or are really lucky, you’re probably not going to get into one of the big firms that most attys dream of working for. And even if you do, you’re likely going to half kill yourself trying to make partner. In the end all of that wasn’t worth it for me. But for some people it is, to each his own.

    • Brian on January 3, 2013 at 10:26 am
    • Reply

    Jacob’s suggestion to apply for scholarships like it is a job is a great idea. There are so many small/obscure scholarships out there that go unclaimed. Of course he should have already filled out the FAFSA and should be talking to the schools he is interested in to see what kind of aid packages they are offering.

    C is also right that he should make sure that he really wants to practice law and doesn’t just want to add the initials JD to his name. The sad thing about law school (and to a lesser extent college in general) a lot of times the name of the school will get you further than what you actually learned there, so if he isn’t going to a top tier school the debt load will probably not be worth it.

    1. Good points. The college that gave me the biggest financial aid package is where I ended up attending. I think some people can get infatuated with having fancy degrees, so it’s important to make sure that you don’t just want the degree, but the job that comes with it. My graduate degree’s “name” seems to help me much more than my undergraduate degree’s name. Has it gotten me any further in my career? I’m not sure, but I hope it at least gets my resume a second look.

  12. I think you covered them all really well. I never would’ve thought of negotiating, but it makes complete sense. I would recommend working when they can and living by a simple budget so they can stretch their money further.

    1. I wouldn’t have thought of it either (nor would I have thought it would work). Thankfully a mentor of mine suggested it. She saved me a lot of money that way!

  13. I wouldn’t have thought of negotiating either! Unless I was some sports superstar or something. But it makes sense for the more common student, too. The only thing about working a job; if you qualify as an independent student on FASFA, you’d want to make sure the income you’d be working was either NOT enough to be disqualifying you from receiving federal grants or enough to compensate them (can be up to 4k a year…so it’s probably worth it to work, but with what some of those college jobs pay and the hours they offer you’d want to make sure.) Most students don’t qualify as independent, anyways.

    1. I’m certainly not a sports star, or even a freakishly good student. My undergraduate GPA was 3.67. I think they were more interested in my background working at non-profits.

      Good point about the FAFSA and aid. You definitely don’t want the school to think that you’re making enough money to pay in full out of pocket. Then they’ll charge you the whole tuition and then you’re defeating the purpose.

  14. You already have some great tips about avoiding student loans. The big thing with law school is he has to understand that he MUST work as a lawyer yo pay off the debt – no freebie or cheap stuff. He needs to be sure that he fully understands that before going to school, and not just doing it to avoid life.

    1. A lot of my friends went to grad school because the economy was bad or because they weren’t sure yet what they wanted to do, or they just didn’t want the responsibility of working yet. But once you get those loans you’re pretty much locked into working, and working a job that makes enough to pay them back (like you said, if you go to law school you’re gonna have to be a lawyer, and a well paid one to pay them off).

  15. I think mostly this is really sound advice, but I want to point out something I feel you missed, and that is the opportunity cost of foregone income while in school. You talked about your friend taking 1.5 years longer to do his MBA in exchange for free tuition/housing for being an athletic assistant. I don’t profess to know whether his campus job was at all relevant to his career, or if it was just a money earning gig to put himself through school. Assuming something like that has little resume value, it’s possible that he forewent 1.5 years of pretty high income with an MBA to receive tuition and housing. Depending on the school (state vs. private), geographic location (was free rent worth $300/month or $1,500/month?), and how much income he could have made with his degree if he finished 1.5 years earlier (are we talking $40k/year or $150k/year)? then the choice he made would not always be the most rational in every situation.

    Of course everyone has to do the math for their own situation — but I think too often people reach for easy decision rules (“don’t take on student debt EVER,”) and miss the larger picture that it can sometimes be economically wise to do so. Sometimes the answer is GET THROUGH SCHOOL AS FAST AS POSSIBLE and start earning money right away. Sometimes if debt is the only way you can pay for a lucrative degree, then it’s still worth it. Yes, loans can be discouraging psychologically, but if you really understand how the degree they paid for changed your earning potential, then it’s more than worth it.

    I agree with all your other advice about minimizing living expenses and not taking on frivolous debt, of course.

    1. All good points. My friend went to a private university in NYC. The job he was working was in the athletic department-he is a sports fanatic and wanted to somehow tie sports and business together (so it all made sense-for him). He was 1 year out of undergrad at the time so he wasn’t making super money, actually he was working part-time as a chef, so for his situation it was a wonderful deal and a great experience. For other people it could have been a terrible career/school decision.

      I understand and appreciate that it’s not always possible to go through school without student loans. I’m sure most MD didn’t have hundreds of thousands of dollars saved up when they wanted to go to med school, nor could they work while going. I think get through school asap is a good tip I completely missed. If you can do advanced credits or an accelerated program, then you should totally do it. Obviously the fewer years you’re there the better (financially speaking).

    • jim on January 4, 2013 at 6:08 pm
    • Reply

    Wow guys – thanks so much for all your input. I think I’ve had everyone of these conversations with my son, but I’m going to pass this on to him ’cause maybe he’ll hear it better from you guys. I just cringe at the thought of him going into that kind of serious student loan debt – particularly since the market for lawyers right now sucks (really bad roi). I’ve even tried talking him out of going to law school but he is convinced that is what he wants to do – 100% (and maybe I’m biased, but the kid does seem to have a natural apptitude for it – Lord that child can argue any issue with anyone – ha!)

    But, seriously, we really do appreaciate your having taken the time to chime in with some words of wisdom. Lets see how much $ he can scrounge up in the next few months. Thanks much!

    1. You’re so welcome Jim. I’m glad you commented because I think so many people are in a similar spot and are wondering how to make it all work. Hopefully your son will be able to save as much as possible, finish as quick as possible and graduate with a job that makes him happy and financially secure!

    • jim on January 4, 2013 at 10:12 pm
    • Reply

    Because you and all your readers have so generously given their time and energy to helping us try to figure this whole thing out, I will be happy to report on all the ups and downs we will inevitably be facing in the next 3 3/4 years – if you’re interested in that and if it might help similarly situated people. When you go to law school, you really can’t “get out as quick as possible” – unlike undergrad.

    I am so loving this whole “lets help each other out” site. Keep up the good work.


    1. Thanks Jim. I’m not only interested, I insist that you keep us updated. I know he won’t be able to finish sooner then 3 years, but hopefully can finish is the allotted time necessary for his program. I know a couple of people who finished college (just regular 4 year undergrad-not a special program or anything, in 6 years-yikes!) Glad I didn’t have to pay their student loan bills.

      I don’t always have all the answers, but I’m lucky to have some very smart and very generous friends and readers who can share their experiences and give advice.

    • jim on January 5, 2013 at 1:13 am
    • Reply

    If you really think traveling down this road with our kid going to law school in 8 months is worth your time & trouble, then I’m game. I hope (like hell) it will help someone else down the line. So, here’s the countdown – January 2013 – spouse and I were really going to throw 3 X the mortgage payment at that sob so we could be mortgage free by 1/1/3016. (This is well after we paid our own undergrad/grad school loans – living well below the poverty level and getting both kids thru undergrad entirely debt-free).

    Then, recent college grad kid who is now living at home (to save $ for law school) car died – for the very last time. God bless good ole one eyed sal. And the reason she is one eyed (or at least used to be is ’cause that gal got both our kids thru high school (can anyone scream “seriously, another accident?”) and college (you just gotta love a car that does that) AND one year into their post college jobs. RIP one eyed sal!!!

    So, once we got our youngest thru college debt-free we really, really did think we were going to be able to pay off our mortgage and fully fund our retirement – ha! (What’s the saying? When men make plans God laughs – or someting to that effect).

    So now, in the very first month we were trying to implement the “throw all the extra cash at the mortgage” – our son needs a car/beater – whatever – he needs transportation to his jobs. Not buying a car really isn’t an option, so there goes the extra payment on the mortgage and there goes our ER fund to buy another fricking car.

    Wow – so Not how we intended to get 2013 off & running – but, alas, that is reality.

    Do you or your readers really want to travel this road with us for the next 3-4 years? It isn’t gonna be pretty. It’s gonna be tough and in many respects is going to suck royally ’cause we were planning on doing a little traveling this year – figuring that our kids were actually grown and educated.

    So let me know if you really do want the gory details. It isn’t going to be pretty.


    1. Jim, I’d totally love to hear how everything unfolds. Shoot me an e-mail or comment on a post every so often and we can do periodic updates. I’m excited and nervous for your son, but I think there’s a lot to be learned about debt and expenses and life from your life/story. It’s a story that I think a lot of people (including myself in a lot of ways) can identify with. Ps. I have a post coming up about my first car, we’ll just call her the “death mobile” 😉 Hang in there, I suspect it’s going to be bumpy road, but you’ll make it through!

  16. Excellent points here shown from escaping student loans which can save ones financial position & make it more strong for future, thanks!!!

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