Have kids going to college? Here’s how Clark Howard says you can avoid taking out student loans

ATLANTA — What would you do with $1 trillion? You could buy Mcdonald’s, GM, and Coca-Cola all together, and still have billions left over.

This makes the fact that Americans owe $1.6 trillion on student loans even more sobering.

Channel 2 consumer adviser Clark Howard has some practical advice about how current students can avoid taking on student loan debt in the first place.

Higher education burdens millions of Americans with massive debt.

“How much student loan debt are you all facing, each of you?” Howard asked several college students.

“I’m about $120 in debt, $120,000,” Sam Masters said.

“And I’m about $60,000 for law school,” Sophia Watkins said.

“I think I’ve taken at least $7,500,” Georgia State University student Damien Jackson said.

Rachel Smith goes to the University of Georgia.

“I’m working two jobs, saving up money, and constantly just paying off those loans right now,” Smith said.

“I have a lot of friends with student debt,” GSU student Aba Thomas said.

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According to the Federal Reserve, the median amount borrowers owe is between $20,000 and $25,000.

In many cases that debt can be avoided, but it’ll take some effort.

One way is to apply for scholarships.

“I’m getting around $6,000 extra because of the scholarship. Scholarships can help you take any surprise costs out of the way,” GSU student Jorge Sotomayer said.

Gabrielle McCormick founded Scholarship Informer and she told Howard that there’s a scholarship out there for everyone.

“There are all kinds of weird scholarships out there. There are some out there for Star Trek fans where if you were a vegan or if you like, crocheting if you’re left-handed if you love scuba diving,” McCormick said.

Her advice is don’t just apply for the big money.

“When everyone is looking for those and you have to make sure that you have that approach of the more applications I get out, the better my chances are of actually winning. But it can take you several before you really start to build the momentum to move forward in the process,” McCormick said.

For parents, helping their child graduate with little or no debt starts years before they ever apply.

It’s something Thomas’ family did for her.

“They did invest some of the money and that money grew and I was able to go to college based off of what they did for me when I was little,” Thomas said.

529 plans are tax-deferred like a 401k and money can be taken out tax-free for certain education expenses.

“Just be able to save that money and build generational wealth like how she wanted is the most important thing, especially being a minority and especially being a woman,” Thomas said.

For students who absolutely need to take out loans, Howard said avoiding private loans is key.

“What I learned about private loans, is it is very easy to get yourself in more debt than you were before, and over time could be harder to pay them off,” Jackson said.

You never realize how versatile you can be. A lot of employers will actually pay for your college education if you work for them 20 hours or more.

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