4 Alternatives to Student Loans to Reduce Future Debt
In a previous blog post, we pointed out one of the many serious implications to taking on student loans (link to that blog post). With that being said, it is also very important to know that in order to raise your household income, a college degree is very necessary. Currently, student loans are the main source of funding for a college education, and students are less aware of the alternative options.
Here are 4 things you can do to reduce the number of student loans you take in:
Complete your elective credits at a community college
While community colleges do not have as much prestige associated with them, you can still get a high-quality education from them. Community colleges are also a far more affordable option compared to state schools (and even more compared to private universities). Often times, the best way to save money is to take classes not related to your major in community colleges to get credit to complete your education.
Apply for scholarships
While it is difficult to earn full-ride scholarships, there are other platforms that provide smaller scholarships that are easier to attain. While it is still not easy to attain scholarships, it is important to know that every dollar you get now will be a dollar-plus-interest you don’t have to pay later. US News.com has a great directory of scholarship search engines you could use.
Much like Kickstarter, it is now possible to crowdfund your own college education. Amazing sites like WeFinance provide a platform for people around the world to finance your education. You can create your own campaign to raise funds, and set your own terms of repayment.
Income Share Agreements (ISAs)
ISAs are a great tool to partially finance your education. Simply put, an ISA allows financiers to invest in you. You only pay back a percentage of your salary and nothing more. Since your ISA providers’ incentives are tied to your outcomes, they would want you to do your best in your career. Unlike student loans, the amount you pay back on your ISA is typically based on your career potential, not your credit score (and let’s be honest, not every college student has the best credit scores). Among the many benefits, ISAs act as quasi-insurance since you will be paying back less if you end up making less. Purdue University is one of the few colleges that are currently offering an income share agreement program to their students.
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