Taking on Student Loans: An Ounce of Prevention is Worth a Pound of Cure

Making sacrifices in the short term will lessen your student debt load in the long term

If you've already graduated and are looking for advice on managing your student debt, the following may seem a bit like closing the barn door after the horse has gotten out. But if you're thinking of either starting or going back to college, keep this simple advice in mind: every dollar you can keep yourself from borrowing now means one less dollar (plus interest) you'll have to pay back later.

The biggest financial mistake most college-bound young people make is that they borrow as much money as the bank or government is willing to loan them, not how much they actually need. The reason lenders are willing to loan you so much money is they don't care whether you can pay it back comfortably or uncomfortably - they just care that you pay it back. It's up to you to make sure that the amount you owe after graduation won't be an albatross around your neck for years to come.

That's easier said than done. If you are 18 and fresh out of high school, the allure of a big college loan from the bank may be hard to resist. In the short term, it may mean you get to enjoy the same lifestyle you had under your parents' roof. But the truth is, you're not supposed to enjoy that same lifestyle. They call it being a "starving student" for a reason.

That means making sacrifices. It means plundering the couch for spare change so you can buy a bit of food to tide you over until the paycheck from your part-time job comes through. It means going without creature comforts like cable TV, cell phones or an iPod. If you're lucky enough to own a car, it means driving a beater with an engine that could die at any moment.

Of course, some students come from wealthy families and are able to finance these creature comforts with money from Mom and Dad. But if you're financing them on student loan money alone, it may be a decade or more before you get to enjoy these luxuries again.

In the grand scheme of things, four years is not a very long time (though it seems otherwise when you're 18) and living on the cheap while at college is a good way to learn the value of money and how to stick to a budget. Most student loans are amortized over at least 10 years, if not longer, and the more scrimping you can do when you're younger, the less you'll have to do when you're older.

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