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Debt. It’s a word that in one context can mean a feeling of appreciation for a service or favor; as in: “We owe them a debt of gratitude.” In another context, it can mean something drastically different: money owed or due.

For many college freshmen, there is excitement and feelings of freedom as they enter a new phase of life. In the process of entering college most students make new friends, pick a major and practically sign their life away on a couple pieces of paper without even knowing it. Samual Garner, writer for Slate Business and Finance, states the sad truth.

“No one, in five years of higher education, advised me differently or really broke down the cost of my education choices,” Garner wrote. “Why would they? Schools benefit immensely from this ignorance. In fact, several students, faculty and friends – many of whom had high-paying jobs – told me not to worry about my loans and that I’d pay them back without undue stress.”

Students take out loans knowing it will help them pay for school, but few know the amount of time it will take them to pay them back and the amount of interest that will be accumulated.

According to Student Loan Hero, a company that assists students with paying off loans, Americans owe over $1.3 trillion in student loan debt, spread out among 44 million borrowers. That leaves each borrower with an average of about $37,172 in college debt. Student Loan Hero calculated that on average most borrowers will pay $351 per month for 10-15 years. Depending on the types of loans that students take out, interest alone could take between 1 and 10 years to pay off. Along with college debt, most people within the first 10-15 years of graduation will purchase a new car or house or even get married. Living off an entry-level salary becomes even harder when large purchases and additional debt are added to the mix.

The amount of debt Americans hold is only increasing – and in fast rates. According to Student Loan Hero, student debt is up six percent from last year. 30 years ago, when our parents were going to college, the average student walked out with less than $9,000 in student debt, according to the United States Department of Labor. That means that graduating debt has increased 10 times and tuition is 12 times higher than it was 30 years ago.

The sticker price for GV tuition is roughly $34,000. According to a U.S. News and World Report study on higher education, 83 percent of full-time undergraduates at GV receive some kind of need-based financial aid, and the average need-based scholarship or grant award is $16,666. That is almost half of the tuition cost, but according to U.S. News and World Report, the average graduating student in 2015-2016 owed $34,687 in debt.

Why? Are students not educated on their choices? Is it pure laziness? Or do students feel they don’t have any other options but to take out loans?

Although many students have fallen into the trap of college debt, some have escaped this misfortune.

According to Time Magazine, three out of 10 students walk out of college completely debt-free. How can this be, especially when stated above that Grand View University graduates are owing an average of $34,687 in debt? Obviously, it’s different for everyone; some really luck out on scholarship and grant money, while others work three or four jobs to make payments every month.

“One thing is guaranteed: To graduate debt-free you will need to think creatively and be willing to sacrifice far more than you would like,” wrote Chris Taylor, representative of the Family Financial Education Foundation.

This might mean shopping at thrift stores instead of name-brand stores, not taking those spring break vacations like everyone else, eating in the cafeteria or cooking for yourself instead of eating out, staying in for weekend activities rather than going to the movies or bars, cutting back on going to the hair salon or getting your nails done or even skipping out on buying that new video game.

As Taylor mentioned, getting through college debt-free will take sacrifice, and it also requires you to educate yourself.

A recent Citizen’s Bank survey found that 59 percent of graduating Millennials have no idea when their student loans will be paid off.

“Students understandably don’t want to look at the details of their loans while they’re in school,” wrote Heather Jarvis, an attorney and student loan expert. “But when you leave school, you could spend more money than you have by making uninformed decisions.”

Looking at how much you owe in student loans while in school might be stressful, but it beats realizing that you owe anywhere from $30,000-$60,000 after graduation. Making a plan ahead of time can help lower your stress.

The first step in making a plan is educating yourself. In order to take the correct steps, you will need basic knowledge on what a loan is and how interest works. According to Investopedia, a loan is the act of giving money, property or other material goods to another party in exchange for future repayment or the principal amount along with interest or other finance chargers.

Investopedia also states that a loan may be for a specific, one-time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount. To simplify, it is money given to you once or for a length of time, by someone else, that you will end up having to pay back interest.

What about interest? According to The Federal Student Aid Office, a division of the U.S. Department of Education, interest is money paid to the lender in exchange for borrowing money. It is calculated as a percentage of the unpaid principal amount (loan amount) borrowed. In short, it is extra money added onto the loan amount taken out that you will have to repay.

The Federal Student Aid Office provides charts and tables breaking down each loan and what amount of interest can be added over time. There are many different types of loans, and according to The Federal Student Aid, interest varies depending on the loan type and the first disbursement date of the loan.

The point that they are trying to make is that for whatever loan you take out you will always have to pay back more, and the longer you take to pay it back, the more you pay. This is why having a plan and knowing what types of loans you are agreeing to take out is so important.

Not every person will make it through college without taking out a loan. But if you need to take out a loan, Time Magazine came up with four tips to help graduates be successful at getting through school with the least amount of debt and pay off that loan quicker.

 

Tip 1: Start Early

Most high schools in the United States offer their students college credit courses or allow them to dual enroll. This could give students enough credits while in high school to graduate from college either a semester or a year early.

According to Forbes, graduating a year early can save a student approximately $42,419 (assuming
no scholarships).

$42,419 = A new car (depending on type) + insurance for a year.

Tip 2: It takes a community:

Live at home, and go to a community college your first two years. Yes, we all want to move out and experience freedom at 18, but is the cost of freedom worth it?  According to Ashley Eneriz, a writer for Money Crashers, students can save anywhere from $12,000-$66,000, depending on what school they transfer to, by attending community college first. Not only are you saving money, but you are also given the chance to raise your GPA, which can mean more scholarship money when you transfer.

$12,000-$66,000 = Part of a house or a whole house, depending on type and location.

Tip 3: Work year-round

“Having a summer job is a given if you are looking to graduate debt-free,” Taylor wrote. “But take advantage of work opportunities during the school year, as well, to really cut down that final bill.”

Many schools offer on-campus jobs, and part-time employment can also be an option. Saving over the summer is a simple way to start on payments for the fall and spring. Setting up a payment plan ahead of time so you know what to budget for each month sets realistic goals for what you need to save and what you need to take out in loans.

Tip 4: Make applying for aid a job

 

“Pursue every possible avenue of funds imaginable: parents’ employers, religious bodies, community service clubs or philanthropic organizations,” Taylor wrote. “FastWeb.com has a database of more than 1.5 million of them, which provide $3.4 billion in funding.”

“Spend ample time at your Student Aid office, and apply for any unused grants and scholarships,” wrote Minneapolis financial planner Andy Tate in “Debt-free college grads: How do they do it?” “It sounds simple, and it is, but no one does it.”

According to USA Today College, $2.9 billion in federal grant awards went unused in the last academic year. The easiest way for students to receive money without having to pick up part-time jobs is through scholarships and grants.

Although most of us will never be one of the three out of 10 students who graduate completely debt-free, lowering the amount you owe can help create an overall better life.

Mark Kantrowitz, one of the nation’s leading student financial aid experts, said that students who graduate with excessive debt are about 10 percent more likely to have delays in major life events like buying a home, getting married or having children. Twenty percent are more likely to have their employment plan influenced by their debt.

This can make many college students question their purpose and their education. Too many graduates end up taking jobs outside of their major or picking up second jobs to make ends meet.

Although some put blame on the shoulders of colleges to better educate their students on the difference between loans, grants and financial aid, it does come back to the students to educate themselves and make the sacrifices needed to lower their college debt. Ignorance is bliss, but you can only be ignorant for so long.