I have had some serious conversations recently with a parent and student who applied to college, was accepted, and was shocked at the cost. The parent didn’t want to disappoint her daughter. The daughter wanted desperately to go to an out of state college that would cost over $50,000 per year with no financial aid.

After speaking with the daughter at length, she decided to defer for a year, work, save her money and apply for scholarships. Taking out loan was not appealing to either of them and I completely agreed.

Parents and students should consider college funding even before their student applies to college. The inevitable result is the parents and students borrowing to pay and usually borrowing more than they can repay after graduation.

What do the statistics say?

Each year about this time we begin to hear the whispers of a “student loan crisis.” Those students who are graduating in May are just now beginning to feel the impact of their borrowing decisions during their college career. Many have not really gotten set up on their personal future yet. Some have found that their post-college job doesn’t quite match up financially to their expectations. And some think they can ignore debt, and it will somehow magically just go away.

These alumni will probably be dealing with their student loan debt for many years to come. It can affect their ability to borrow money for a car or a home, and could defer any life decisions they make about getting married or having children of their own. Those who do not pay off their debt will find it more difficult to carry on their adult life activities, as potential employers pull those negative credit reports or the government starts garnishing money from their meager paychecks.

How can you avoid graduating with too much debt?

The big takeaway lesson to be learned for this year’s class of rising high school seniors is clear: be careful about how much money you borrow to help finance your education. Here are some steps to take so you don’t borrow more money for college than you will be able to repay down the road:

•  Understand the True Cost of Attending a College—Most colleges will have some type of a Cost Calculator on their website which is designed to help prospective students map out a budget. While this can be a helpful starting point, don’t just take your results as a final answer. They base their information on the average cost to attend their institution and the average amount of financial aid each student receives, but this may or may not be true in your specific situation. Do your own calculations based on your family’s financial situation, and be sure to add in the miscellaneous costs you incur by attending each college.

•  Maximize Your Financial Aid—Do not make assumptions about the amount of financial aid you may or may not be able to receive. You may be able to receive support from the federal government, your state government, and the college institution itself, but you will never know for sure until you file the FAFSA and get your financial aid award letter from each college. If money is tight in your family, you may need to adjust your selection criteria based on that factor.

•  Borrow Wisely—Really, really, really make sure you understand what happens when you borrow money through federal student loans and private student loans. Interest is a big deal, and it will always cost you more to repay your loans than what you borrowed. The trick is to minimize the amount of interest that builds up on your loans. With certain federal student loans, the government subsidizes the interest during your college years, while other loans merely defer it. That means interest can build up during the entire time you are in school. Also make sure you completely understand what happens to your interest with various loan repayment options, where interest may still be building even though your payment is reduced or deferred.

•  Apply for Scholarships—Don’t wait until the last minute to start applying for scholarships. And don’t stop applying once you get into college. Every dollar you win is one less dollar you will have to repay after graduation.

•  Spend Wisely—The best way to minimize the amount of money you have to repay, of course, is to minimize the amount of money you borrow. But some students and their families don’t understand this concept and borrow the maximum amount of money available, instead of trying to find other ways to cover their costs of attending college. Some compound the problem and make it even worse by using credit cards to further subsidize living expenses during the college years.

Student loans can indeed be a very helpful way of getting you through college, but they must be used wisely. Make smart decisions about how much you borrow, and carefully anticipate how much money you will earn after graduation so you know how much you will realistically be able to repay.