top of page

Understanding the Dark Side of Student Debt - Part 2: Ways to Prevent It

By William Sun

Although student debt is often portrayed as a life-threatening, inescapable force, there are certainly many steps you can take to prevent such debt. Through careful planning, perseverance, and an understanding of student loans, you can avoid the trap of student debt.

First off, here are some red flags to avoid when it comes to student loans.

Forbearance: During times of financial crisis or stress, forbearance is simply a temporary postponement or lowering of student loan payments. While this may seem like a helpful tool to take a break from student loan payments, it is actually terrible for many struggling students. The main catch is that the debt still remains after the forbearance period. Not only do you still have to pay the money, but interest accrues during that period, increasing the debt while giving a false sense of security for the students. Ultimately, forbearance only causes greater complications and issues.

Borrowing Extra Money: Despite there being an option to borrow high amounts of money, you should aim to only borrow what you need for just college costs. Considering the effects of interest over time, each dollar taken out could eventually translate into double that amount by the time you graduate.

Cosigning a Loan: Simply put, cosigning a loan involves sharing the loan with another student, who essentially acts as a co-borrower and is also responsible for paying back the loan in full. If your co-borrower is not as careful or proactive as you, their own failures to pay back the loan could extend to you. For instance, if your co-borrower is late in their payments, not only is their credit score affected, but yours is too.

Taking Private Instead of Federal Loans: Generally, federal loans are preferable for many compared to private loans. While federal loans have fixed interest rates, generous repayment terms, and income-based forgiveness, private loans often have much less fair terms for their loans. The finance company, Navient, offers poor customer service and can push customers into forbearance, where you can temporarily stop paying loans but still have to pay the money.

Failing to Save Money and Postponing Payments: Without creating a detailed plan to begin saving up money to pay off loans, you may be in trouble. If the monthly repayments begin to stack up, you may not be able to keep up with those payments, eventually leading to an accumulation of debt and a damaged credit score. Thus, it's critical that you take extreme precautions when saving up money.

Next, even beginning in high school, there are certain things that can be done to prevent student debt.

Be Proactive with Classes in High School: Taking rigorous courses, keeping up strong extracurriculars, and creating strong college applications all contribute towards better financial aid. Moreover, by taking college-level courses, either through AP, IB, or community colleges, you can begin to accumulate credits that can be transferred to college, potentially eliminating a semester’s worth of work and costs.

Look for Scholarships/Grants: If you are in an especially difficult financial situation, you may be eligible to apply for a grant, which does not need to be paid back. On the other hand, by demonstrating exceptional academic, athletic, or musical/artistic ability, you may be able to acquire a scholarship. For many, sports are a key to college due to their potential to provide scholarships. By expanding your academic portfolio, focusing on a sport, or pursuing an artistic hobby to a higher level, you may be able to avoid student debt entirely.

Taking a Job: Naturally, to save money for repayment, jobs are the primary way to do so. Even in high school, finding a part-time job within service or food industries gives you an early head start on saving money. During your attendance at the college, you can find opportunities to work even on campus that can give unique ways to lower costs. In particular, working as a Resident Advisor or Assistant on campus may provide unique price cuts on food and housing.

bottom of page