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Quick Guide: Paying for college

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Paying for college is one of the biggest financial challenges that many people will take on in their lives. Whether you’re paying your own way or helping out a student, however, there are some important rules that you need to follow. Ignore these five guidelines, and you wind up owing more in college debt than you can afford.
1. Pick a major. This may seem obvious, but too many students make the mistake of going to college to just “take some classes” and “figure out what they want to do”. Colleges encourage this attitude because they make a lot of money off of it. Students who declare a major in the first year spend less time and less money on getting their degree than students who don’t. If you don’t know what you want to study, spend some time in the workforce trying out different jobs. You’ll earn some money, and you won’t rack up college debt.
2. Don’t take out more in loans than your first year’s salary. Ten percent of students in this country have over $100,000 in student loan debt. Paying this back can next to impossible unless you have a job that pays a lot of money. Unfortunately, too many people take out the loans and just assume that they will figure out how to pay back the money later. These people realize to late that they cannot discharge student loan debt in bankruptcy, and that they have to come up with a way to pay it back or risk having their wages garnished for the rest of their life.
3. Don’t eliminate schools because you think they cost too much. A lot of people assume that just because the published sticker price is smaller, public schools are cheaper than private schools. An article in Smart Money magazine, however, studied this concept and discovered that many private school were able to use their endowments to provide more generous financial aid than many state schools. Because of this, many students were finding that attending a private school made more financial sense than attending a public one.
4. Plan out your classes in advance. While it may seem that this advice has little to do with college finances, the truth is that this is probably one of the best ways a student can save money. When you have selected your major, sit down and plan out which classes you will take for each semester until you graduate. This is especially important if your degree requires classes to be taken in sequence. If you miss the opportunity to sign up for one of these classes, your degree can be pushed off for a semester or even a year until the class comes around again. In the meantime, you often cannot take other classes needed for your degree, but your financial aid may require you to remain a full-time student, forcing you to pay for classes you neither want or need.
5. Don’t be afraid to work during school. While there are people who tell you to concentrate on your classes, studies have shown that students who have a job during school are more likely to graduate. Plan your classes so that they don’t interfere with your work schedule.

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