College loan debt may be inevitable for many, but it's possible to limit amount, pay off in good time

In 2012, about 71 percent of students graduating from four-year colleges had student loan debt, according to the Institute for College Access and Success. Data from the institute also shows the average amount of debt, and the number of students with debt, increasing steadily in the past 20 years.

At Southeast Missouri State University, some 65 to 68 percent of students have to borrow money to pay for school, estimates Karen Walker, director of student financial services at Southeast, and she doesn't see that number going down anytime soon.

"It's getting harder for students to pay because the federal aid programs haven't kept up. They're not increasing (funding) at the same level as tuition, room and board, and other direct costs to attend school," explains Walker, who has worked in the financial aid office for more than 30 years.

At the same time, she says, "The state has decreased funding directly to institutions, and the only way institutions can make up the difference is through tuition."

As long as school funding and student aid programs aren't keeping pace with the increasing costs of operation, Walker says she believes paying for school will continue to be an issue for many students and their parents.

While the university's financial aid office doesn't have much control in helping students manage their debt, says Walker, staffers are able to teach students the ins and outs of the loan process and help them access the tools necessary to finish their degrees. The university has received grant funding for providing financial literacy information on loan repayment and default prevention, as well as online loan counseling.

In addition, Walker says Missouri Department of Higher Education statistics indicate the students who are most likely to default on loans are those who carry a lower balance, probably because those students dropped out of school early in their education and began working jobs that don't provide adequate funds for loan repayment.

"We really believe students have a better chance of paying back their loans if they complete their program," says Walker. The idea is that if students stay in school, they will be more likely to complete their degree and earn a job that will provide enough income to start repaying loans, she explains. Therefore, the financial aid office helps connect high risk students with tutoring, counseling and other services that can up their chances of remaining in school.

"Ideally, we would sit down with every student and talk through everything," says Walker. "I would tell them, don't borrow more than you need, don't use it for something that's not education-related. I would ask, will your career choice or major be able to support how much you're going to borrow? Will your job support a monthly loan payment?"

Tyler Cuba, a certified wealth strategist at Cuba Financial Group in Cape Girardeau, says consumers are requesting fewer financial aid dollars than in years past, many for fear of having excessive debt or not being able to find a job after graduation.

Individuals are also looking for alternative methods to pay for their education wherever possible, keeping their use of debt for college funding to a minimum, says Cuba.

"Parents are utilizing 529 plans that offer tax-deferred growth and potential tax-free withdrawals, students are seeking programs that offer financial assistance in return for work or other commitments, and the demand for education from junior colleges and two-year institutions has increased due to how much tuition at larger institutions has inflated over the past several years," he says. "We are seeing people consider colleges and funding options much more carefully than in the past."

Walker encourages students and their parents to look into all funding options available, including merit-based and community scholarships. And it's never too early to start saving, she adds.

"Students and parents need to be very involved in the discussion of how they're going to pay for school. This should occur long before you enroll in the first semester," she says. "How important is it and how willing are you to sacrifice your own resources? Almost always the family has to kick in somewhere."

Nontraditional students may want to consider online classes or attending school part time so they can maintain a steady income to put toward their education. Don't quit your job until you know what will happen with your financial assistance, she advises, and don't miss any financial aid deadlines set by the school you plan to attend. "We never get enough to go around," says Walker, and students who miss the deadlines won't be considered for financial assistance.

For those who already have student loan debt, Cuba says it's all about strategy and knowing your options.

"If you currently have high-interest student loans or have found it difficult to pay your monthly payments, consider consolidating to lower-interest loan options or seek an income-based repayment plan," he says. "Seek the help of a financial professional to help you make appropriate decisions for your particular situation."