Tag: debt

5 Ways to Avoid Student Loan Debt

Let’s have a moment of real talk real quick. Student debt is absolutely crippling young people in this country. Up-and-coming members of the workforce suffer from massive amounts of debt that will keep them from truly relaxing for decades upon graduation—constantly struggling and worrying about making that next payment. What’s worse – while a chapter 13 can help you avoid a foreclosure or repossession (Want A Fresh Start, LLC), student loans are not bankruptible. They’re not going away.

We’ve compiled the best strategies for avoiding debt—you know debt, it’s the kind of crippling thing that makes a grown man cry himself to sleep every night.

1- Look for Alternative Education Options

The easiest and most effective way to avoid debt, at least of the student loan variety, is to just not go to college in the first place. I went to college, so maybe that’s why I’m a little bit jaded. So let me preface this by saying – I believe in the importance of education! Education is the single most important investment you can make in yourself. However, it is simply not the case that a 4-year degree from a liberal arts university is the only or even the best kind of education for you.

If you’re going to spend money on educating yourself, the education MUST come with useful, marketable skills in the workplace. If you’re passionate about history, philosophy, or lesbian dance theory – I’m very happy for you. A library card is free. Unless you know almost for certain what you want to do as a career, then college may just be a waste of time and money if you’re going just to go, and have no real sense of direction as to what to do with your degree once you actually graduate with mountains of debt and no job prospects (CBS News).

When deciding between a trade school, a traditional university degree, or self-teaching the skills you need, it’s important to follow the opportunities, rather than your passions. Passion is definitely an asset, but it’s entirely possible there is no marketplace value for the thing you are passionate about. Look at the unemployment statistics, growth prospects, and average earnings for each degree, certificate, or program. Research the jobs you think you want to train yourself for. You don’t need to do something you hate, but you need to have a realistic understanding of the opportunities available. Chances are high that the avenue you pursue doesn’t require a PHD in lesbian dance theory.

2- Scholarships

I didn’t apply for scholarships, and boy, what a regret that was. Perhaps if I had been a more diligent student, then maybe I would have looked at all of the dozens of scholarships my university offered, not to mention the several that the state offered in part of its education funding. Sure, I got by with my Pell grants and federal loans, but dang, I wish I could go back and apply for any of the literally hundreds of scholarships available to pretty much every single person who goes to school because there are one easy way to avoid debt.

3- Fellowship Aids

These are almost the same thing as grants and scholarships, but mostly come from the universities themselves. I know that the MFA and MBA programs that my university offered supported students by providing grants to all students enrolled to help stipend their tuition costs. Every school is different, so the one you may want to go to might not offer any fellowship grants to its students, so it might be wise to look into schools that do to avoid serious debt.

4- Student Teaching and Interning

Being provided with your own class and canvas to teach is perhaps one of the best ways for education students to step into the role of the master and begin to hone their craft of teaching. That, and it also helps that most universities offer teaching positions for most of their graduate students as a way to help pay for their tuition, pay for their books, and provides stipends for them to live on while they go to school and immerse themselves in whatever they’re majoring in. Similar programs exist for other professional degrees like healthcare, where you can sign up to work for a specific hospital or clinic for a number of years, and in return they furnish partial or whole tuition reimbursement.

5- Work Your Ass Off

Somehow in our culture we’ve become allergic to work – especially college students. Some young people think they are owed a “college experience” – which pretty much means getting wasted six nights a week at a frat party and waking up in the tub of an unattractive stranger. Not that I’m speaking from experience or anything. The truth is, students who work at least 20 hours a week actually see a slight bump in GPA, and typically report higher levels of satisfaction with their educational experience despite higher levels of stress (Bureau of Labor Statistics). Besides that, having some work experience under your belt when you graduate will have a more significant impact on your job placement than your GPA.

So there you have it. Some pretty self-explanatory options, but all almost certain ways to help you avoid going in debt to go to college.

5 Ways to Avoid Bankruptcy

Declaring bankruptcy is one of the most negative life-altering events you can experience. For teens, the consequences of filing for bankruptcy can last well into early adulthood. Not exactly the best way to start your future. Below, there are five ways to avoid bankruptcy. They will help.

Live on a Budget

Budgets are super easy! At the top of the page, try to figure out how much income you’re going to get this month. Even if this number is the same every month, your expenses won’t be, so make sure you do a new budget every month. Now, you need to try and guess how much you’re going to need for all your expenses. These are clothes, dating, eating out, entertainment and recreation, savings, and any other expenses you are responsible for. Allocate every dollar of your income to these categories, and withdraw that amount of money and put it into an envelope. Try not to overspend in any category – that’s how debt happens! This process is even easier with tools like Mint or Everydollar that will help you figure out your expenses and can even deduct the money from each category as it comes out of your bank account.

Avoid Debt

We’ve done extensive research, and it turns out an astonishing 100% of bankruptcies happen to people who borrow money. Our culture and probably even your parents have always told you that there’s no way to get an education or buy a car without going into debt, but this is just not the case. Most Americans today are living paycheck to paycheck and using their credit card as their emergency fund. All of these things can be done much better by saving up and paying cash. “Building credit” is a scam that has sentenced too many young people to a life of financial servitude. Don’t get a credit card, don’t pass go, and don’t collect $200 in late fees.

Settle and Negotiate Your Debts

Essentially, debt settlement is making a deal with your creditors, and sometimes it takes some creative negotiating. If they are faced with never getting their money back or a reduced payment plan, lenders will obviously choose to create a reduced payment plan. Some creative negotiating tactics work well like asking for a waiver of current payments but agree to make larger ones later. If creditors are calling all the time and demanding money, there’s a high likelihood they’re actually violating federal laws. You may consider contacting Collection Bully – not just to hit back against abusive collectors, but sometimes they can even help get some of your debt forgiven!

Sell off Property

In Chapter 7 cases, the court appoints someone to pick property and sell it off to cover debts. Look at the bare minimum of what you need and sell off the rest. Then, use the cash raised to pay off some debts. Even if you are unable to raise a lot, at least it is on your terms.

When all else fails, remember that bankruptcy is not the end of the world. According to Eric Severeno, “When you file for Chapter 7 bankruptcy or for Chapter 13 bankruptcy, all of the creditors who have been hounding you and performing collection actions against you will be legally forced to stop. All financial proceedings against you…will come to a halt.” Whether you can get current and pay off the debt, or whether you need to file in order to escape, either way the goal is to start adulthood with a fresh start. The important thing is for you to change the behaviors that put you here in the first place, or the whole cycle will start again.