Hi everyone,
I’m currently a full time community college student going into my sophomore year and I’ve managed to save about $60k in a high-yield savings account. I’m trying to figure out the smartest financial decision before I transfer to a 4-year school.
My plan is to major in either Finance or something related and live on campus after I transfer. The school I’m looking at would cost around $30–35k per year for tuition and housing, and I’d have about 2 years left after community college(going for my bachelors). My parents aren’t helping with tuition, I don’t have scholarships or financial aid right now, and the $60k is basically all the money I have saved.
The thing I’m struggling with is whether I should use most of my savings to pay for school and try to avoid debt, or take student loans and keep a good amount of the $60k as a safety net. I don’t like the idea of graduating with debt, but I also don’t like the idea of draining almost all my savings and having no emergency fund or cushion after graduation.
I’m working part-time right now and plan to keep working during school, but it wouldn’t cover a huge portion of tuition.
What is the best thing to do in this situation? Also this is my first post so if this isnt the correct place to post this please let me know.
Posted by Webbbed
3 Comments
No idea if this the right place, but I wouldn’t liquidate all your cash just to avoid some student debt. You will have the opportunity to repay the student debt later, and conventional wisdom says you want to keep some “emergency fund” in reserve just in case something happens in your life.
Student loan debt is not fun, but is a perfectly-acceptable stepping stone in developing marketable skills and expertise that you need for your career and beyond.
Work as much you can now, continue to make your bills, and live within your means as much as possible. Do well in school, keep your eye on the prize, you will be able to beat the debt later, that’s acceptable.
You sound like you have a good plan and a good head on your shoulders. Personal finance is personal, your route can’t be compared to other folks with a different situation. You got this!
If the financial aid office offers you loans that won’t accrue interest while you’re enrolled or have a heavily subsidized rate, it would be a reasonable move to preserve some of your cash. With a finance degree, you should be in a better position to get a job than most of your peers. Still, you’ll need some cash on hand to get established, things like a security deposit for an apartment, getting work appropriate clothing, or buying a cheap car to get to your job. If you do take out loans, my priority would be making sure that it’s a manageable amount that can be quickly paid off once the paychecks start coming in.
So while doing community college, the best way is to to increase the amount of work before things get crazy to increase your buffer.
Take advantage of scholarships, this is probably one that will help immensely.
You’re doing community college, so not much else you can save here. Is there a way for you to graduate 3 years?
If you haven’t yet, do FASFA and specifically use subsidized loans (to avoid interest until after you’ve graduated), you still have to pay a small fee for taking out the loan.
The only other expense is if you can manage it is to figure out how to get the “housing” part down. If you can get it cheaper it’ll save you in cost.