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?