SchoolisHard

Once you get accepted to college, you will begin to receive numerous offers to borrow money. Whether or not you do so depends upon just one factor: how big the difference is between what you have and what you must have.

For students attending inexpensive public universities, loans are not always necessary because the financial gap is small.

Those in the Ivy League endure costs nearly double the average annual adult salary in the United States, so loans are a must. This article is meant for those attending schools somewhere in between.

Tuition may seem cheap enough at most places, but it is only one of the variables which comprise your total cost. Even if you live off campus in a cheap apartment and eat nothing but rice and beans, you will still need thousands of dollars per school year for things like books, gasoline, and more. To determine whether or not you must get loans, we are going to do some simple math. List the following:

• Total estimated cost of attendance. (This should include everything. If your school’s estimate is a bit low in your eyes, factor in what you think is missing.)
• Total amount of savings, scholarships, and parental or governmental assistance you will be receiving. Estimate if you are not yet certain.

Subtracting what you will be able to pay from the total estimated cost of attendance should leave you with a nice, hopefully diminutive, digit. Whatever its size, circle it; we’ll be coming back to it.

Let’s consider some other factors.

• If you are a junior in high school or younger, you are ahead of the game. The earlier you can start saving, the better. Every extra month that you have to earn money will save you hundreds of dollars in student loan debt. If working during the summer and during extended breaks will keep you from needing loans, do it.
• The closer you are to starting college the more likely you will have to get loans. You simply won’t have enough time to catch up if you are only 3 months away from your first day of classes.

As you can see, time is the primary factor. Regardless of the actual work being done, as long as you have a good head start, you can insure that you have as little debt as possible by the time you graduate.

Let’s go back to that circled number. Thousands of dollars may seem impossible to obtain, but don’t let this figure overwhelm you. It takes multiple blows of an ax to fell a tree and lots of careful planning to make sure it is done right.

Here is a hypothetical situation:

• $11,000 is needed to make it through the school year. Not all is needed up-front since a few thousand involves food, rent, and books several months later. This lowers our total needed before school starts to around $8,000-$9,000.
• It is the first week of June.
• You work full-time and earn $9 per hour. After paying for gas, your cell phone, and the occasional movie ticket or eat-out, you put about 900 dollars in the bank.
• School starts the first weekday back from Labor Day.

As you can see, this student has waited simply too long. Even with 3 months of steady work, without loans this student will not have enough cash to foot the bill. If you are in this situation, work as much as you can so that you avoid borrowing any more than you have to.

Here is another situation:

• It’s the first week of June. You just finished your junior year of high school.
• $15,000 will be needed to make it through the school year, with $12,000 of that needing to be available in September of the following year.
• You work full time during the summer and part time during school and earn $7.50 an hour. Adding up the summer months for this year and the next, you expect to put around $5500 in the bank since you ride your bike to work, don’t use a cell phone, and rent movies from the library, among other things. From your part-time work during the school year, you expect another $5500.
• Due to your low level of overall income, you will be receiving a refund of your federal tax which will total around $1400 with both years combined. (TIP: You won’t be receiving the larger portion of this until the Spring of your 2nd semester of college.)

This student will need to borrow very little, if any. By being frugal and planning ahead, this student can most likely lower the original estimate of $15,000 by utilizing some smart ways to save money.

Start soon, work hard, and save hard. Do these things and your answer to this blog’s title will be self-evident.