Steps for Conquering Student Debt

By Matt DeBallaway-1356948_1280

I remember very clearly when God nudged me to pursue ministry as a career. I also
remember the palatable community atmosphere of a Christian college, and knowing that it was God’s next step for me. Though both of these experiences were nearly a decade ago or more, they are memories I have often revisited to recall God’s faithfulness. What has followed both of these events is in line with Paul’s blessing: “The one who calls you is faithful, and he will do it” (1 Thessalonians 5:24).

Though your experience may be rather different than mine, all who follow Jesus are faced with opportunities that require counting the cost and taking steps of faith. My 18-year-old self could not have fully understood the endeavor of paying for college, but did understand that college (and, later, seminary) was an investment in my future. Thankfully, I was blessed by the support of my parents, my church, and my schools (via scholarships), which significantly reduced the amount of student loans required to complete my degrees.

Having completed my time in college and seminary, repaying student loans has begun. Here’s what this next step of my journey looks like:

1) Before graduation, chosing a repayment plan that would work best for my wife and me. Depending on which plan you choose, you may be able to change plans later. Typical
board-2084777_1280options include several standard repayment models (the same payment amount every month during the course of your loan, smaller payments leading to larger payments, and vise versa) and income-based repayment plans. There are also options for deferring loans if your current financial situation is difficult and prevents you from repaying with a regular plan.

2) Making small (or significant) lifestyle adjustments to pay for student loans. This includes finding a source of additional or increased income and/or cutting back on leisure expenses in order to faithfully make monthly payments.

3) As often as possible, paying more than the minimum monthly requirement. In addition to cost savings, you can target the lowest valued loan with the highest interest rate, and over time decease the rate of accumulating interest as you pay off each loan (what many call the “snowball method”).

4) Celebrating milestones along the way. celebrate-1835387_1280Regardless of how much you owe or how many loans you have, its important to celebrate when you pay off a student loan or decrease the value of your loans a certain amount (e.g. every $5,000 or $10,000).

5) Having hope that loan payments are purposeful and won’t last forever. Even the loans with the shortest lifespans (10 years) can feel like they will never end. Even though repayment can take (a long) time, it’s important to remember the results of your loans: a quality education, the opportunity to be qualified for desired jobs, and/or being faithful to God’s call for your life.

If you find yourself in the midst of paying back student loans, take heart: God has been faithful in the past and will continue to be faithful in the future.

About the Author

m-deball-9-2016Matt DeBall is the COMPASS Communications Coordinator for the Ecumenical Stewardship Center. He also serves as Coordinator of Donor Communications for the Church of the Brethren. He has an MDiv from Northern Seminary of Lombard, Illinois and a BA in Communication Arts from Judson University of Elgin, Illinois. He loves running, reading, and napping. He and Chelsea live in Northern Illinois with their Welsh Corgi, Watson, and attend the First Baptist Church of Aurora.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you’ve read? Visit the COMPASS web page, follow us on Twitter, and join the COMPASS community on Facebook.

Image credits: pixabay.com

Practical Advice to Keep Your College Years Affordable

By Ryan Zantinghdouble-coins

Despite a growing skepticism about the value of a college education, the evidence remains clear that those with a bachelor’s degree have nearly double the annual earning potential and half of the unemployment rate of those with only a high school diploma[i]. But investing in a college degree is expensive—there’s just no getting around that.

A solution to the high cost of college will require better teamwork between the government, colleges and universities, lenders, philanthropists, education think tanks, and other stakeholders. But until that happens, there are some very practical things that you can do to keep your college years affordable. Below are eight pieces of advice:application-1883453_640

1. Apply for Scholarships Early and Often: Most students apply for scholarships when they are entering college, but fewer continue to apply for scholarship opportunities throughout their college years. Colleges usually have some scholarships that are available only to continuing It would surprise you to learn how often colleges extend their scholarship application deadlines because no one applied.

2.Save: Outside of receiving as many scholarships and grants as possible, the best way to reduce the cost of college is to save. College savings will reduce the amount of loans that students will need to repay (with interest). There are college savings accounts that offer preferential tax treatment, like 529 plans or Coverdell Savings Accounts in the US and RESP in Canada.

3. Complete the FAFSA or Canada Student Loan Application: in the US, The Free Application for Federal Student Aid (FAFSA) is your application for federal, state, and college need-based grants and need-based employment. It also makes students eligible to borrow Federal Direct Student Loans, which offer far superior terms than private student or parent loan options. Even students without financial need can borrow these loans. To maximize opportunities for assistance, complete the FAFSA early (it becomes available each year on October 1). When you apply for a Canada Student Loan, you are automatically assessed for eligibility for Canada Student Loans and Canada Student Grants, which are based on financial need.

4. Don’t Over-borrow: I often see students borrow more money than they need to meet their expenses, usually because they want to make sure they have enough. Careful planning and budgeting can reduce over-borrowing. If you still borrow more than you need, ask the Financial Aid Office to return what you don’t need rather than receiving a “refund.”

5. Be Frugal: Try to buy used textbooks or rent them when possible. Is a new laptop a necessity, or will your college’s computer labs suffice? If you do plan to purchase a laptop, check with your college’s IT department about free software—some schools provide their students with a license for Microsoft Office or other software at reduced or no cost.target-970640_1280-cropped

6. Keep Your Eye on the Target: Nothing increases the cost of college like adding another semester or year of school. In addition to the added cost, it delays your future earning potential. Don’t compromise your grades by letting too much work or play get in the way.

7. Accelerate Loan Repayment: If you can, try to start repaying your loans while you’re in school. Even small regular payments can really add up. When you graduate, try to pay more than your minimum required payment. By paying ahead of schedule, you will significantly reduce your interest payments over the life of your loan.

8. UPromise: in the US, UPromise by Sallie Mae allows you to earn cash back on shopping, dining, travel and more, which can contribute to a college savings plan or pay down eligible student loans. While you could do this with any cash-back rewards card, UPromise easily allows family or friends to earn rewards on your behalf as well.

[i] Mangukiya, Piyush. “[Infographic] Is College Worth the Cost?” The Huffington Post. TheHuffingtonPost.com, n.d. Web. 06 Dec. 2016.

About the Author
ryan-zantingh-tcc-trnty-edu_fa-staff

Ryan Zantingh is Director of Financial Aid and Enrollment Operations at Trinity Christian College of Palos Heights, Illinois.

 

Image credits: Trinity Christian College, pixabay.com