One of my biggest financial regrets was taking out student loans for college. My wife and I currently have about $110,000 left to go on our loans and frankly, that number is hard to look at. I know for a fact that I could have graduated with $0 in student loans but I was just stupid with my money. I had great jobs throughout college but instead of using my money towards school, I used it for other useless junk.
I imagine many of you did exactly what I am about to tell you. Every semester, after the financial aid office received my Stafford loan disbursement, it was always for more than I owed the school. So of course, they cut me a check for the difference. Instead of using that money to pay off the loan (because I obviously didn’t NEED the money), I blew it on stuff that I can’t even remember. It was something that I always looked forward to every semester because it felt like free money. I thought to myself, don’t worry about it, you’re going to get a great job when you graduate and you’ll be able to pay it off in no time! Well, after 6 years of doing it (undergraduate and graduate), it added up. Now I’m stuck paying over $600 a month just for my loans. Oh, and I’m not even working in the field I got my degrees in!
Postpone College Until You Get Enough Cash?
Looking back, I know I could have paid for my first year of college with money from high school jobs. Well, what if you didn’t have a high school job and your parents didn’t save anything for your college? Should you wait a year until you get that money saved up? Personally, I think that it’s best to pay cash from the beginning. If you don’t have enough cash to start school then get a job to help pay for it. At least it will force you to get out in the real world and get some experience being an adult. That can be invaluable.
In addition to getting a job, you should also be looking for scholarships a couple of hours a day. Apply to as many as possible. The majority of them will probably reject you but I bet you will get a least a couple. Just think, the more scholarships you get, the less physical work you have to do!
You’ll Learn More By Paying in Cash
Another benefit to paying in cash is how it almost forces you to learn more. I have taken several classes that I paid cash for and I studied a lot more because I didn’t want to pay for it again. When I took classes using loan money, I slacked a little more. I’m not sure why, but I just knew I wouldn’t feel the financial pain as much if I had to take the class again (I never had to take a class a second time).
What do you think? Should you go straight to college even if it means taking out student loans?