Leveraging Personal Debt in College

Debt and College Finances

In today’s society, education is ubiquitous with success. Whether education means learning a trade, self-education or the formal training at a university, the skills persons develop are competitive advantages that afford themselves greater opportunities to be successful in life.

The sad reality, however, is that many students who elect to enter into the university system graduate with debt that extends years into their professional careers and inhibits their ability to maximize their return on investment. Any student of business will tell you that carrying debt is an advantage for a business; carrying debt for yourself is, however, ill-advised.

This article breaks down the specific actions a potential student can take to minimize the long-term costs of college. While not all will apply to each individual, the majority of items are applicable and actionable. The three periods of action are pre-college, collegiate years, and the immediate post-graduation years.


As trite as it sounds, proper preparation prevents poor performance. As in business, preparation for the upcoming event can maximize the return on the new project. Before college, prospective students should:

1. Maintain a high level GPA

2. Pursue scholarship opportunities to include

o Athletic, minority, STEM, business, academic, and many others

3. Apply for state-funded tuition coverage plans

o In Florida the Bright Futures program offers students with certain minimum GPAs almost complete tuition coverage

4. Work part-time and put away a portion of each paycheck to save for college

5. Speak to their parents about a college savings account

Although some of these may be difficult, especially for lower-income families, any student, given the requisite desire to improve themselves can make good on most of the 5 items here.

During College

During my time as a student, I consistently maintained a part-time job and made attempts to minimize my borrowings to fund my education. I understand that to complete a college degree or trade program, a person may have to borrow some money. The contention of this article is that one should minimize borrowings and take steps to reduce the amount of money borrowed.

During their college years, students should:

1. Maintain at least part-time employment whether to cover tuition, books, or living expenses

2. Save a portion of each paycheck for tuition, books, and living expenses in the following semester(s)

3. Apply for scholarships

o I was unaware as a new undergraduate that scholarships were readily available to students even after starting college

4. Live at home

o I realize some students do not have this opportunity, but if you are fortunate enough to be able to attend a university in your city, living at home is the best option

o If you cannot live at home, get a roommate(s) whom you are comfortable with

5. Consider Community College

o Less expensive, smaller class sizes, more face time with professors are all things that students have said about these institutions

o I attended a community college and thoroughly enjoyed my time there. I also did not accrue any debt during this time

6. Pursue an in-demand or to-be-demanded degree

o This is not to disparage the social sciences or the arts, but the figures show that non-STEM and non-business degree graduates do earn less than their “technical” counterparts

o That said, if you do have an earnest interest in a subject and can earn a wage that would satisfy your lifestyle choice, pursue whatever field you choose.

7. Live within your means, borrow as little as possible, and only borrow subsidized

o No, you don’t need that new smart phone. You’re in college and don’t have a six-figure salary. Live by your means.

o Stafford loans are subsidized by the federal government and don’t accrue interest in your name until 6 months after graduation

As with the pre-college time, not all may apply but the majority are doable and teach frugality, and cost-benefit analysis skills.

After College

Congratulations, graduate! Now that you’ve attained your degree and procured decent paying employment, it’s time to talk debt. If your desire is to maximize your return on investment, it’s time to start paying off those student loans. After college, working professionals should:

1. Pay off as much of their student loan debt as possible during the 6-month grace period for debt

o Each payment is 100% principal. Zero-interest payments actually put you ahead financially

2. Make your payments on the debt as large as is feasible

o Interest accrues over time. Less time, less interest

3. Live frugally until you’re student-loan free

o See item 7, bullet 1

Unlike the previous two sections, the after-college years are doable by everyone.


Hopefully this brief article helps prospective, current, or post graduates steer their financial futures into the right direction. While this article is not a comprehensive treatise on personal finance, the ideas in here are beneficial to anyone who will or has entered college. I truly wish you the best financial success.

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