Preparing Your College Student to Eliminate College Debt

More and more college students are racking up college debt and it comes in two forms: student loans and credit cards.  However, there are several steps that you can take as a parent in Los Angeles to prepare your college bound student that will allow you to significantly reduce or eliminate college debt all together.

• First and foremost, college students need to know how to budget themselves.  Most college debt comes in the form of credit card debt and this is often in the thousands of dollars.  This can be eliminated in several ways:
• Don't send your student to school with a credit card and if you do, choose a card that only has as much money on it as you place on it.  If the student does find themselves in an emergency, you can load the card with enough money to cover the cost.
• Teach the importance of paying off the balance each month.  Not only does this limit college debt, but if the card is used then the student is able to gain a positive payment history which will boost their credit score.
• Educate your student on interest rates and how much more money a charge on the credit card will cost them in the long run.
• Get a joint credit card with the student so that you can see the bill each time it comes in.

Student loans are another area of college debt that can haunt students for years to come.  In today's society, it's not uncommon to graduate from college with $30,000 worth of college debt caused by student loans.  If your student is able to select which loans they accept from the school, be certain that they are federal loans.  These loans often have a much lower interest rate than those that are obtained from private lenders.  

Additionally, teach your student to only accept what he or she really needs to get through the semester when going to school in Los Angeles.  Just because they are offered a large student loan does not mean that they have to take the full amount.  Be active in this decision with your student so that you are able to keep tabs on how much college debt they are accumulating.  

At the same time, always apply for federal aid; even if you don't think you'll be eligible, you never know what you might be able to receive.  Also, always be on the lookout for scholarships and grants.  The best college financing aid is the aid you don't have to pay back.

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