College can be an incredibly expensive investment. With tuition costs consistently rising, it’s easy to think that student loans are the best answer when it comes to payment. However, many young people don’t realize that these loans can follow you around for decades, and can directly impact them in future when purchasing a home, car or anything that requires credit.

Student loans are best to be avoided. It can ensure a more stress-free life, and a brighter future when it comes to making big purchases. Though it may seem challenging, getting through college loan free is the best way to do it.


The Interest Rates Are Incredibly High

When taking out a student loan, it’s easy to mistake the fact that what you take out is what you owe. This, however, is not the case. The biggest factor in what makes student loan payments difficult is the interest payments. At the end of the day, the institutions that give out loans need to make money as well. This is where interest comes in. These interest rates can get enormously high, with some exceeding 18%.


This is the main reason why you should avoid taking out student loans – while it may not seem like much when you get it, it will certainly be a lot more expensive when you’re paying off the interest down the road. Instead, set aside a certain amount per month relative to the target tuition. So for example, if the target school’s tuition is around $20,000 in total, try to set aside enough a month that you can pay those fees. At the end of the day, you’re going to have to pay it, and if you take out a student loan you can add interest fees to that as well.


You Can’t Get Away from It

Another thing that people don’t realize when it comes to student loans is the fact that you can’t escape them. Once you rack up that debt, it follows you for life. This can get especially stressful once those loans get into the tens of thousands of dollars.

Even bankruptcy can’t make your student debt go away. While debt such as credit card debt can disappear once filed for bankruptcy, student debt stays with you. This is because of the unclear law describing student loans. Loans can not be discharged unless it is causing “undue hardship” however, that term isn’t even defined in bankruptcy law meaning that it is subjective.


Federal Loans Vs. Private Loans

Under certain circumstances, you may find yourself in a position where you need a loan in order to get through school. If you fall into this category, remember that Federal Loans are better than Private Loans. While private loans may sometimes seem like the easiest way to get the most amount of money, you must stop yourself and look towards the future.

Federal loans have fixed interest rates and they can be deferred due to economic hardship or unemployment. Private loans, however, do not offer the same. Private loan interest rates are never fixed, and you can end up in way more financial debt than you planned because of this. So if you do need help during college, remember to go Federal, not Private.

 Another rule of thumb to remember if you decide to take out loans is to never exceed your expected first year’s salary. What this means is if you are looking to make a career as a teacher, which on average makes a starting wage of $36,620 a year in Michigan do not take out a loan higher than that salary. If you take out more than that $36,620, you’re going to find yourself having trouble paying that loan back.


If you can avoid taking out student loans you find that you will take years of stress off of your life. While saving up for college may seem difficult – it’s the best route to take in the long run. However, the reality is many people will have to take out student loans in order to get through school, and that’s okay. Just remember – only take as much as you need, not extra. Federal loans are also the way to go, as you’ll end up with less interest in the long run.