Long time, no see!

Oh, what a year it's been. I can't believe I haven't posted since last September! I was caught in a whirlwind of lectures, papers, history texts and Russian novels--so I apologize for not updating sooner!

For the record, I am still 100% free of student debt. My first year as a full-time university student was paid in full by the lovely state of California (thank you, Cal Grant B!). As long as I remain full-time with good grades, my senior year will be paid for as well. While my circumstances are unusual, I believe it is possible for any student to receive a quality college education without the heavy burden of student loans.


With this blog, I aim to help students like me achieve their academic goals without the expensive price tag. In today's economy, a good education is an essential asset when competing in an unforgiving job market. That's why becoming a debt-free student is the first key to success!


On that note, I leave you with some invaluable advice from an article in Readers Digest Magazine:

The #1 Reason to Skip the Expensive Colleges: 

Beginning adulthood without debt is far worth more than a designer diploma.

The authors’ No. 1 rule for parents: Don’t let your child go into debt for college. In 2010, almost two thirds of undergraduates borrowed money, and student-loan debt outpaced credit card debt for the first time. The College Board likes to say that a typical senior graduates with “only” $24,000 in debt, but with interest, collection charges, and penalties for postponed payments, the amounts owed can exceed $100,000. If you ever default on a federal student loan (and the rate of defaults is rising), you’ll be hounded for life. Lenders can garnish your wages, intercept your tax refunds, and have your professional license revoked. You can’t work for the government or collect your social security. “People have been sold this propaganda: ‘The rates are so low; just get a loan,’ ” Dreifus says. “The long-term effect is to cripple your children."


(Click here to read the entire article) 


Until next time,


T

The Young and the Burdened

This article was written by Jane Bennett Clark, a senior associate editor for Kiplinger.com.

Digging Out of Student Debt

When Angela Moore looks into her future, she sees checks for $500, $147, $280 and $250 piling up like leaves in a forest. Those are the amounts she could be paying every single month on her four student loans, which total $92,000, for the next several decades. If she postpones payments, the amounts she owes will go up. If she skips them, she could ruin her credit and end up in court.

Moore, 26, graduated with a bachelor's degree from the University of Hartford in 2009 with $25,000 in federal student loans and $67,000 in private loans. She devotes about half of her paycheck to those bills and resorts to credit cards to cover other expenses. Says Moore, the first in her family to graduate from college, "It's heartbreaking to have a college degree and not be able to pay for normal things because I have to pay student loans."

Moore works at an orthopedic surgeon's office, the same job she had in college. She would like to move on someday but can't afford to make less than her current wage of about $18 an hour. Nor does she see an obvious way out of her predicament. "If you're in that much debt and have a house or car, you at least have something you can give back. I have a piece of paper. I have nothing to give back."

Here is the link to the full article: http://finance.yahoo.com/college-education/article/110724/digging-out-of-student-debt

Ok, so here's the deal. Angela Moore is in up to her eyeballs in student debt. She holds the same job she had in college (that pays $18 an hour!). Initially, she took out $92,000 in loans to attend the University of Hartford in Connecticut. The current tuition costs for this private university are $29,852 per year (according to collegeboard.com). That amounts to $119,408 for four years. Because Ms. Moore took out $27,000 LESS in loans than needed for tuition, it is possible she:
a) paid less for tuition at the time
b) did not stay in dorms
c) received scholarships and/or some form of financial aid
d) worked and paid off some fees while in college, or
e) received a college fund from her parents.

Now, I'm sure the University of Hartford is a fine school. However, if Ms. Moore had gone to a state school, she could have saved thousands of dollars and years of agony. So, let's say Ms. Moore was a resident of Connecticut when she applied for college. Rather than spending $119,408 for four years at the University of Hartford, here's what she could have paid (and saved) had she attended Southern Connecticut State University in New Haven instead:

Southern Connecticut State University

In-State Tuition and Fees: $8,050.00

Four year total: $32,220.00

Total Savings*: $87,188.00

*savings compared between University of Hartford vs. Southern Connecticut State University
according to collegeboard.com

Here's what she could have saved going to the University of Connecticut:

University of Connecticut

In-State Tuition and Fees: $10,416.00

Four year total: $41,664.00

Total Savings*: $77,744.00

*savings compared between University of Hartford vs. University of Connecticut
according to collegeboard.com

University of Connecticut

Not to rub it in for poor Ms. Moore, but according to the 2010 University and College rankings for Connecticut, the University of Connecticut is the SECOND BEST college in the state (following Yale University!). University of Hartford ranks at #8, falling behind another state school, Central Connecticut State University.

This is one example of why it pays to attend a state school rather than a private, for-profit school. I will most definitely continue this discussion later. Have a great weekend everyone!

Introduction: The Truth About Loans

Hello all! Welcome to The Debt-Free College Student!

You must be here for a reason. Whether you're fresh out of high school or going back to college after a long hiatus, Debt-Free can help you get through college without the burden of student loans.

Some may question, why not take out a loan or two? By the time you earn your degree, you'll have a great job to pay the loans off, right? While I'm all about being optimistic, here's the truth about loans:

• Unlike scholarships, grants, and financial aid, student loans must be paid back. With interest.
• Interest rates for loans, whether they are subsidized or unsubsidized, can run anywhere from 3.4% to 6.8%.
• Private student loan institutions require a FICO score, or credit score of at least 630 for approval.
• Planning on graduate school? Studies show graduate students borrow even more money than undergrads. On average, the debt for a master's degree is $25,000. For a doctoral degree, $50,000, and almost $80,000 for a professional degree.
• During the 2007-08 academic year, the average amount of undergraduate student debt was $23,186. 
• The amount of interest paid on a loan for $23,186 at 6.8% interest over a 10-year payment plan? $8,832.79 total. That's more than one-third of the amount borrowed!

Loan Balance: $23,186.00

Interest Rate: 6.80%

Loan Term: 10 years

Minimum Payment: $50.00

Monthly Payment: $266.83

Number of Payments: 120

Cumulative Payments: $32,018.79

Interest Paid: $8,832.79

I know these figures can seem daunting, but they are not meant to turn you away from the idea of college. The worth of a degree goes far beyond the price, and there are countless ways to graduate without thousands of dollars in loans. You can prepare and get through college on your own terms!

Here are some of the money-saving topics I'll be introducing over the course of this blog:

How to start and maintain a savings account

How to get your first job

When and where to scrimp, save, and sacrifice

Living at home vs. Moving out

Going to Community College

Transferring to a 4-year University

How to receive Federal and State financial aid

How to apply for (and win) scholarships

How to fill out financial aid forms

How to save on everything, including textbooks and supplies

I hope you'll stick around and find out what it takes to be a Debt-Free College Student!