U.S. Sen. Sherrod Brown (D., Ohio) talked at Perrysburg High School this week as he tried to raise support for two bills which he says will help protect students needing college loans.
Both measures are logical and helpful steps to give borrowers more options for financing their higher education. That alone won't drastically drop the $30,000 in college loans owed by the average college graduate in Ohio.
His bills would allow borrowers to refinance the loans, much like a house mortgage, and would require lenders ro clearly state possible penalties, fees, and rates changes in disclosure documents. Being more knowledgeable about borrowing money and having options after you borrow are helpful.
But tuition rates aren't going down.
Until that happens, college graduates will still be stacked with debts.
I graduated from Central Michigan University in December, 2012 with debt, but luckily not $30,000 of it though. In no way am I a financial adviser, but I think there are some more practical pieces of advice I can give to Perrysburg High School students considering going to college.
1) Work. Extremely obviously right? Still worth being mentioned: being a waiter or waitress or having a flexible construction job is not luxurious and will probably will leave you frustrated and exhausted. But if you are able to do so your junior and senior year of high school, juggled around going to school and doing extracurricular activities, and during the summer, it will help immensely when you get to college. Also working while in college is a must. You have to have income to defray debts and expenses.
2) Buy a cheap but reliable car. Yes, your older siblings nice new car is sweet as is your friend's shiny 2013 vehicle his parent bought for him. But if you are heading into college, there are three things you need in a car: You want one that won't break down constantly, won't guzzle gas, and won't kill your bank account to buy it. That likely means a boring, older but stable vehicle.
3) Consider community college. For some students, the college experience the first two years in dorms is invaluable. For me, saving several thousand dollars going to community college while getting the same degree after four years was more important. Degrees after four years, when two years transferred, don't have an asterisk, but could slash your student debt in half. Between living at home for free and having much lower tuition made a big, big difference.
4) Try to cover at least living expenses. It sounds difficult, but if you don't set goals on limiting student debt it will spread like wildfire. If possible, try to work enough, save enough, and be frugal enough to take out loans only for tuition. Working and living with several roommates in the apartments which aren't best maintained will help you be able to cover living costs. That and ramen noodles.
These may sound cliche, but they all worked for me.
Not that Mr. Brown's talk this week wasn't informative and that his legislation won't be helpful. But if I had 20 minutes to try to tell Perrysburg High School seniors how to graduate with less than $30,000 in student loan debt, that is what I would key on.