The average amount of undergraduate debt these days is $37,132. That comes to $393/month for at least 10 years. The typical undergraduate takes almost 20 years to pay off their undergraduate debt. Imagine a starting salary of $55,000 before taxes. That’s $4123/month for rent, car, and health insurance, food, utilities, taxes, and loan payments. Almost 10% of your monthly salary is gone before you ever see it.
A common rule is not to take out more debt than your anticipated first year salary. So for humanities majors, you may be looking at $50K, Computer Science $75k. Figure out a typical monthly loan payment using this calculator and then decide what works for you.
So what CAN you do to avoid steep debt?
- Apply to scholarships anyway. All you have to lose is time.
- Start early! You can start applying as early as 8th grade. Most people wait until they know where they are going and have missed the majority of deadlines—fewer applicants = less competition.
- Target schools where you exceed the average stats. Schools with a 3.6 GPA and an 1100 SAT will offer presidential scholarships worth significant money to raise their averages using your higher numbers. Be a rockstar on campus and get paid for it!
- Look local. Organizations that give scholarships only to local students mean less competition. Ask your high school counselor for leads.
- Compare school data using the Common Data Set (CDS) to see typical debt at graduation and average salary ten years out. Simply search “Common Data Set [school name].”
- Stop associating name recognition with the quality of education. Stretch your comfort zone. The entire Midwest is especially ripe with opportunities. Excellent education for more significant scholarships/less debt = life-changing. Or more money for grad school?