College Debt – how to avoid it, and how to get out of it

Because most college students are using loans to finance their college education, debt level of recent graduates is rising rapidly. On average, students graduate owing $12,000-$16,000 in student loans and another $2,000 in credit card debt. Is this price you have to pay for higher education, or can you avoid college debt in first place?

The secret to avoiding college debt is to plan wisely and take advantage of many opportunities to reduce college costs before and during your college years.

Planning ahead You can avoid college debt by making wise high school decisions:

Take advanced placement classes Take all advanced placement classes you can in high school--every AP exam you pass means one less class you need to take in college.

Keep your grades up Scholarships can be competitive, and even grades you make early in your high school years can mean difference in winning or losing. Don't make mistake of thinking you can save hard work for your junior and senior years!

Stay involved Scholarships also may depend on community and school involvement.

Search for scholarships and grants Scholarships and grants are best money source for college because it is money that doesn't have to be repaid. To find out about grants and scholarships, visit your high school career counselor and Financial Aid Office of your intended college. You can also search internet for scholarships and grants.

Investigate public service options The United States Military, National Health Service Corps, and Americorps will give you money for your education in exchange for your signing up for a “tour of duty.” The time commitment ranges from 10-12 months to 8 years.

Who would benefit from a lease option? A lease option is a great deal if you’re a renter but you don’t want to live in an apartment, looking to buy a home but need some time to clean up your credit or you want to buy a home but need time to come up with a sufficient down payment.

You can earn rental income One you sign your lease option agreement and take possession of home, you can also rent it out or sublease it to another tenant and make a profit off rental income. In this case, you would have to charge a rental rate far above rate you are paying to legal homeowner to make a profit.

If you decide to got rental route, be aware that you are in fact becoming a landlord. Do a quick search online or check with local housing authorities in your city to find out your rights and obligations, and also how to structure your rental agreements before you start looking for prospective renters.