1) Choosing an expensive college.
There are a lot of things to consider before deciding to attend a specific college. First, decide what your major is going to be and whether or not your needs could be satisfied with a more affordable community college opposed to an expensive university. Many people choose to attend a cheaper community college for their associate’s degree before moving on to a more expensive school for their bachelor’s degree or higher. If you plan to do this, make sure that your classes and credits can be transferred.
2) Changing your major.
Changing your major after you’ve already started down one path is an expensive and time-consuming decision. Not only will you be paying for credits and hours that you’ve just spent on your first choice, but the length of time you’ll be in college will likely be extended as well as your long-term tuition expenses. Before deciding on a major to begin with, make sure the current and future job markets seem favorable enough that you’ll be getting an adequate return on your investments. Carefully assess your interests and abilities, you don‘t want to choose a major which you really have no interest in simply because it may seem profitable. Looking at current and projected unemployment rates, volume of pertinent job postings and average wages can also be helpful.
3) Taking out private loans before applying for or exhausting federal options.
According to the Department of Education, each year thousands of college students either don’t apply for federal student loans or don’t exhaust their entire allotted amounts before taking out private student loans. The rates on private student loans are notoriously higher than their federal counterparts and the different repayment terms are also something to consider. There is some speculation that the long-contested favoritism between higher education institutes and private banks may play a role in this.
4) Spending the entirety of your borrowed amounts.
Many students take out excessive educational loans simply because they can, accepting every dollar offered. These amounts often far exceed the actual costs of their classes and tuition and may seem like “free money” at the time, but each loaned dollar earns interest. The best way to avoid over-borrowing is to create a solid financial plan before actually borrowing to figure out what the minimum amount needed is and the limit of what you can realistically borrow without going overboard.
5) Not keeping good financial records.
Before starting school, make a plan as to how and when you’ll be paying for everything for that school year. Include reoccurring debts such as student loan payments, car payments and rent, giving yourself a realistic allotment for food, clothing and personal necessities. It may help to make a rotating weekly, bi-weekly or monthly meal menu to help you budget, leaving some leeway to account for rising and seasonal food costs.
Also, credit cards may seem like the easiest way to pay, but with high, interest rates it’s also the most expensive. If you pay only the minimum payments you’ll essentially be doubling the cost of everything. Late payments will show up on your credit report and lower your score, therefore making everything cost more by default. Credit cards should be reserved for emergencies, not everyday use.
6) Not paying on loans while still in school.
Although federal loans and many private student loans don’t need to be paid off until after graduation, making small loan payments throughout the entirety of your debt term will make a big difference in the amount you’ll be responsible for paying once you’re out of school. Just paying off just the interest each month can help immensely.
7) Not living like a student in debt.
The educational expenses of attending college are only a fraction of what it‘ll cost in the long run. Friends will frequently invite you to eat out, there’s always going to be a cool new gadget or accessory on sale in stores, and local or campus events may tempt you to shell out more cash than you perhaps should. It’s exciting to live in the moment, but busting the budget regularly can cause debts to pile up even faster. Making small changes can amount to big savings. Taking the bus or walking instead of driving your own car and car-pooling when you must, making a meal plan with friends to share the cost of food, and buying everything in bulk will all help ease daily life’s impact on your budget.
You can read similar article: http://www.custudentloans.org/2013/01/09/7-worst-student-money-mistakes/