A friend of mine with a financial blog posted an entry about a student who is drowning in $200k of undergraduate debt. I began reading more about this student and thought it may be useful to share some practical advice on navigating financial stuff when it comes to college; although I am lucky enough to have not incurred any college or graduate debt, I’ve done extensive reading, navigated financial aid offices (my undergraduate fin. aid office, due to some issues, eventually memorized my student ID), and learned plenty from friends with various amounts of debt. Regardless of how you feel about her and whose to blame for her situation, there is much to learn to protect yourself from that much debt.

  • Seek out financial advice. In this article, this student admits to not seeking out advice and help at her high school. That is a huge no-no, especially for someone who may not have parents with the knowledge to navigate the financial aid scene. You don’t have to parade around the school, announcing you will be a first generation college student. If your college counselor or guidance counselor is MIA (mine was), ask a teacher. They went through the process and may have kids who also went through the process. Other people in your life, such as neighbors or family friends, may also know what to do. If that fails or you’re too ashamed to ask for help in person, look at the internet and do it anonymously. The US government has a site pertaining to financial aid, and there are many, many others.
  • Apply for scholarships. Plenty exist. I already mentioned I am Gates Millennium Scholar, but there are many other scholarships. Even if they are not full-rides, you can piece little scholarships together to help things. Don’t just search the web; your school district or other local entities may offer scholarships.
  • Look at the school’s financial costs and offerings. Not only consider the amount of attending the school (tuition, room and board) but also the amount of aid that the school gives and the percent of students who receive aid packages. Many schools have these statistics on their websites.
  • Consider extra expenses. Books, travel back home for the holidays, laundry, fun all add up. Make sure to include them in the cost. Also, if doing a study abroad program is part of your plan, make sure that your school extends its financial aid so that you can do that.
  • Negotiate Your Financial Aid Package. If your financial aid package doesn’t offer the amount you need, call up the financial aid office of that school to ask if they would reconsider giving more aid to you. It doesn’t hurt to ask.
  • Ask questions! Before you sign anything (loan, financial aid offer, military agreement), make sure you fully understand what’s going on and that it’s all written out. Bring someone along if necessary. You are signing a legal document that someone will collect on eventually.
  • Transfer into a better school. Some students choose to take a year or two at a community college before they go to a bigger name school; some colleges even have built in programs that allow for that. Small warning: check to make sure each semester that you are taking classes that can transfer into your next college. Some people make the mistake of taking courses that will not transfer in and then have to take extra credits sometime. The registrar’s office should be able to confirm what will and will not transfer in.
  • Consider your goals. Ultimately, what do you want to do with yourself? A working teacher in one of my classes made the good point that it may not make sense to go to an expensive school and get saddled with debt if a) you’re planning on entering a career that will not pay well, b) you’ll end up needing more education, and c) the prestige doesn’t matter much in that career. Although he was talking about people going to expensive schools to become teachers, his point is something to be considered. I’m not telling you to skip going to a prestigious school (certainly, there are worthwhile aspects to prestigious schools), but it is something to keep in mind. In my experience with physics, those who get into physics graduate schools are not just MIT and CalTech grads but a motley group of students. A lot of what factors in is what you do with your education there and once you get out (and some of it is simply luck of the draw). Community colleges and less prestigious schools may be a better fit for your goals. I’ve known incredibly bright people who have attended less prestigious schools, who were very pleased with their educations. I’ve also known people at more prestigious schools who were not happy with their educations; I’ve known less than bright people who have attended some of the best schools in the US. Of course, I’ve known plenty in between at all types of schools. A name school doesn’t guarantee a top-notch education or being surrounded by geniuses. It definitely does not guarantee a job.
  • Negotiate your loans. If you are struggling to pay your loans, not answering the phone or responding to mail will not make them go away. This past October, the Boston Globe posted some excellent tips to handle your student debt.

With college application season full in progress, it is important to keep these thoughts in mind. The most important thing to do is be honest with yourself. Weigh in what’s important and what you’re willing to sacrifice. The point of this entry isn’t to dissuade you from going $200k in debt for an undergraduate (or graduate) degree but help you consider your options and realities. With the economy being what it is, landing a job period is tricky, let alone landing a job that helps pay back high debt. Good luck!