How to be a Good Steward of Your Money and Minimize College Debt

June 29, 2022

You’ve probably heard that the cost of a college education is skyrocketing. In the past 15 years, the average rate of student debt has tripled as tuition prices have followed suit. However, most of us want to be able to give our children the option to go to school debt-free or at least minimize their financial burden when they reach that point in life. 

In our society, it seems very normal to go into debt straight out of high school, but there are several reasons why this is a highly risky move, even for a gifted and hardworking student. 

  • A college education is becoming more expensive, regardless of the career prospects for a given degree.
  • As college degrees become more accessible through student loan programs, they also become more common in the job market. A college degree might not guarantee a high-paying job anymore, especially in oversaturated fields of study. 
  • As students grow and develop their understanding of themselves, they may decide to switch degree pathways or drop college altogether, making debt a burden rather than a worthwhile sacrifice.
  • One out of every 10 Americans have defaulted on a student loan, as they can be challenging to make payments on with a newly-graduated professional’s average salary.

However, this doesn’t mean that your child should avoid going to college altogether. The average salary for college grads is still higher than non-college graduates, which means it can pay off in the long run if the student works hard and succeeds in their career field. However, there are some steps you can take to minimize or potentially avoid college debt altogether, making post-graduate life much easier. 

As a Parent, Invest in a College Savings Plan

It’s never “too early” or “too late” to start saving for your child’s college education – the best time to start is today! The sooner you start, the less you’ll have to put away to reach a reasonable savings goal to pay for at least four years of schooling (or more if your child shows promise in academics and wants to pursue a Master’s or Doctorate).

Using designated college savings accounts such as a 529 or ESA plan, you can save money tax-free, which means more money in your pocket and more for your child when they’re ready to go off to school. 


Help Your Student Look for Ways to Pay for School Themself

Your child shouldn’t slack when it comes time for scholarship applications, as these can foot most or all of their bills and potentially make student loans a non-issue. If your child has talent in a particular area, encourage them to apply for as many scholarships as possible, both at the school they want to attend and for private scholarships.

Your child can pay their remaining student loans with what’s in their college savings account or by working part-time while in school. However, payments can be much more manageable after graduation by paying early or proactively saving for student loan payments. 


Consider Avoiding Private and Out-of-State Schools

Unless you have the scholarships to pay for the tuition or have strong reasons to support the choice, it might be best to avoid private and out-of-state schools for a bachelor’s degree. Tuition may be double or triple what an in-state public university offers, and typically your learning will not suffer. While the glamor of a private school or college far away may be enticing, your child’s financial future might depend on choosing the best in-state college they can.

College is about more than an education – it’s about making your child’s dreams come true through learning and career opportunities found within the university. If you want to prepare your child for their education now and in the future, talk to OneAscent about savings and investment options to benefit their college education.



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