What Happens When the Student Loan Bubble Bursts?

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Edvisors.com reports that students graduating college in 2015 left university with an average debt of $35,051. Both the average debt and the number of students graduating Portrait of beautiful young brunette teenage girl blowing pink bubble gumwith debt grow each year, and many students don’t earn enough just out of college to make a dent in those debts. Forbearances, defaults, and slow payments are a growing trend, even among students with good jobs and a desire to make good on the loans. When it comes down to food and shelter versus student loans, most people are going to choose survival.

While that survival instinct makes sense, the current system can’t continue forever. Eventually, the student loan bubble will burst just like the housing bubble before it. When that happens, it will likely be much harder to get a loan for college, leaving those without substantial savings scrambling to cover costs of education. It could also lead to loans coming due in faster or more expensive ways that expected: some individuals are already experiencing such issues, as loans are consolidated or sold and new terms put in place without the student’s knowledge.

But there are ways to get through a four-year degree without a mountain of debt along with your diploma. In fact, those who are willing to research and work for it can graduate debt free and avoid some of the potential hassle of student loans.

Complete the FAFSA

While many students who complete the FAFSA qualify for student loan programs, some students qualify for financial aid that doesn’t have to be paid back. Since you aren’t obligated to take advantage of any offer based on your FAFSA form, it’s worth completing to see if you’re eligible for non-loan assistance, especially since such programs will likely still exist in some form if the loan bubble bursts.

Seek Scholarships

Even if your family’s income leaves you out of the running for grants, you can pay all or part of your college bill with scholarships. Scholarships are awarded for all types of activities, not just sports and academics. Search for scholarships related to any of your interests, including chess, music, or community service. Pay special attention to scholarships offered locally. Local scholarships often limit eligibility to certain zip codes or cities, which means the competition is greatly reduced. You can stack scholarships, winning a few smaller scholarships to help pay for an entire semester.

Work Your Way

Working your way through college is probably one of the most difficult ways to do education debt free, but it is doable. A minimum-wage job won’t cut it if you have to pay for living expenses plus tuition and books, so this method is more likely to work if you come out of high school with viable skills for an entry-level career. Consider investing some time in technical classes during high school for a chance at jobs in computer, mechanical, and office sectors rather than fast-food or retail.

Start with Community College

In many locations, community colleges collaborate with four-year universities to provide more affordable degrees. Students begin at the community college, working through general requirements and lower-level courses at a discounted price for approximately two years. Students who meet requirements are able to transfer to four-year colleges to complete degrees, and there is no difference when it comes to the final diploma. As an added perk, students who complete the community college requirements are usually awarded an Associate’s degree or certificate that helps them find better work as they continue their education.

Enter College with Credits to Reduce Expense

It’s easier to pay for something that you have to buy less off, and every credit you enter college with is a credit you don’t have to pay hundreds of dollars for. Most high schools in the country offer advanced-placement or college-placement courses, letting students prepare for testing out of certain math, English, and science courses. Some schools even work with local or state colleges to help students earn credits through dual enrollment in a variety of courses. In some cases, these classes cost nominal fees, but they are a fraction of standard college tuitions.

By planning early, seeking all assistance and scholarship options, and being willing to work while you learn, you can pay for your college education before you graduate. Since the student loan bubble won’t last forever, anyone planning to attend college within the next decade should get a leg up on savings and plans for paying for education.

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