Nearly everyone thinks college is worth it, but that doesn’t mean you need to go into debt to get a degree.

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If you make these mistakes in college, you could be paying for them long after graduation.

More than half (56 percent) of undergrads underestimate how pricey college is, says a Barnes & Noble survey.[1] Now they’re in way too deep with student loans, and some might not even know what they cost. But most people still think college is worth the investment, according to Sallie Mae.[2]

So if you’re going to college and considering taking out a loan, here are some common mistakes, and ways to avoid them.

1. Taking out student loans in the first place

Too many students and parents are not diligently looking for other means to help them pay for higher education. The first thing you should do is fill out a Free Application for Federal Student Aid. They can be difficult to understand, but it could pay off big time.

Parents and future students should investigate 529 savings accounts, local civic organizations that provide aid to good students, ROTC options, and more. Go to your high school guidance counselor, explore the web, and hit up the local library for scholarship-based databases. There are some very weird scholarships, too, that almost anyone can apply for.

The point is, a variety of ways to help pay for college are available. Don’t just rely on college loans, because you could end up joining those Americans who owe $1.5 trillion in student loans.

2. Not knowing what your monthly payment will be

It’s crazy, but students and parents accept loans without ever inquiring how much their monthly payments will total. Would you buy a car and just walk out of the showroom without knowing your monthly payment? It’s no wonder so many graduates are floored by the amount they owe each month.

Use one of these calculators to figure out what you’ll owe, because like it or not, you’ll have to pay back your loan unless you qualify for a student loan forgiveness program. But that’s not something you should count on.

3. Not paying interest while you’re in school

If you take out an unsubsidized loan,[3] the interest starts adding up the moment your loan is disbursed. That interest won’t stop accruing until you pay off the loan. Where does the interest go? It’s added on to your principal, which is the total balance you owe.

That’s not the case with subsidized loans, which are based on financial need and don’t start gathering interest until you’re done with school. Get all you can of these before turning to unsubsidized loans, and you won’t have to worry about interest until later.

But when you ignore your unsubsidized loans for four or more years, the principal quietly grows. A $10,000 loan could realistically end up being $12,000 after graduation, so make sure you find out the interest rate on your loan before signing up for one. If for some reason you can’t make interest payments while attending school at least you’ll know how much more money you’ll owe, though that’s not much of a consolation.

4. Refusing to work while in school

One way to solve the interest problem is by getting a part-time job. Restaurants are always looking for part-time help. Many colleges also have job boards. Ask your college counselor about the availability of jobs on and off campus. Once you have a job, you can pay off the interest on your loan each month and build credit.

Students who work part-time and pay off debt will start establishing a credit history. That credit history is what creditors look at when they’re deciding on whether or not you qualify for a loan or credit card after college. It’s really a bonus. You earn a degree and, at the same time, develop strong credit, along with better time-management skills.

5. Ignoring student loan basics

Students must fully understand what these loans entail — things like how much they’re borrowing each year, the type of loans, the interest rates, when to contact their loan servicer, and the types of repayment plans. It’s a pain in the butt. But it’s necessary.

Once the student graduates and the repayment process begins, many act stunned and angry. Paying back a loan is the cost of borrowing. It’s the same as a car loan, mortgage, or private loan. You pay back what you borrow, with interest. Don’t ignore the basics.

6. Not saving for college ahead of time

The best way to save for college is to start early. Parents can start contributing to 529 plans that grow their savings tax-free while their kids are still young.[4]

But young people can save for their own college, too. According to the American Institute of Certified Public Accountants, millennials are the most likely generation to say they’ll delay starting college so they can save more and take out fewer loans. Living at home for a few extra years, and working before or during college is one option to keep costs down.

Is going to college the only option?

One mistake students make outside of student loans, might be their choice to go to college, when it isn’t the only option.

We applaud the 43 percent of the AICPA survey participants who said they’d choose a trade school for a specific profession. Knowing what you want to do saves time and money. The U.S. Department of Education has a website where you can compare the costs of different private schools, public schools, and trade schools.[5]
But if you do choose a trade or technical school, we advise against choosing a for-profit college. The Department of Education has threatened to shut down some of these schools for having some of the highest loan-default rates in the country. Overwhelmingly, they tend to be beauty schools, design schools, or hair styling schools.

Another cost-effective alternative is community college. They include that you attend at least half-time, maintain a 2.5 GPA, and are working toward a degree or transferring to a four-year college.

But if you’ve already gotten yourself in deep, visit’s guide How to Get Out of Student Loan Debt.

Cameren Boatner contributed to this report.

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About the Author

Brian Bienkowski

Brian Bienkowski

Brian Bienkowski has been writing about personal finance for over 15 years covering debt recovery, fraud, and credit topics. He has worked on several personal finance books and guides that help consumers navigate the US credit system. When he’s away from the keyboard he enjoys craft beer and fishing – and once enjoyed a cold Sweet Water IPA after catching a sailfish.

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