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Reduce Your Student Loan Debt While In College: Eight Tips

Mar 12, 2008 Jennifer Williamson, Distance Columnist | 0 Comments

For many high-school graduates, college is supposed to be a time for freedom, experimentation, and fun.  But rising college costs are making it less practical than ever to put other factors before cost when choosing a school.  Four years of fun and freedom sounds great—but you’ll pay for it with decades of student debt.  And that debt forces students to take on higher-paying jobs to cover it, preventing many from following less lucrative but more fulfilling dreams.

Don’t wait until graduation to worry about your debt—you can take steps to reduce it while you’re in college, or even before you graduate high school.  Here’s how.

Choose a school based on cost

It’s not unusual for guidance counselors, teachers, and even parents to encourage kids to choose any school they want, telling them the finances will work themselves out.  But those finances usually “work themselves out” by settling on the student’s shoulders after graduation.  Avoid this by caring about the cost of your school.  Look twice at community schools and state schools, and give serious thought to staying in-state rather than going to school in another part of the country.  Many colleges give significant tuition breaks to in-state students.

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Make sure you’re getting the best deal

During the student loan scandals, it was found that some colleges were getting financial incentives for signing students up for private loans, without telling them they qualified for more federal loan money than the schools offered.

Don’t accept your college’s financial aid offer at face value.  Ask about getting the most you can in government loans.  Ask about the interest rate on the private loans—some colleges may not tell you this up front.  Make sure you know exactly what you’re getting into before you sign.

Make the most out of existing credits

Non-traditional students may be able to reduce the cost of their education by leveraging existing credits.  If you’ve gone to college before, you may be able to apply those credits toward a degree at a new school.  If you’ve been in the workforce for a long time, you may have enough experience to qualify for experience credits at some schools as well.

Get obsessed with finding free money

Your search for financial aid shouldn’t stop with the FAFSA.  Grant and scholarship money is available from nonprofits, state education funds, religious institutions, corporations, and community and fraternal organizations all over the country.  You’ll have to find and apply for these grants separately, but landing a few can make a difference in your tuition—and you won’t have to pay it back. 

Get a job

When you’re in college, you can avoid taking out loans to support yourself—or start paying your loans back early—by getting a job.  Many schools have work-study programs that allow students to apply their earnings toward tuition. 

Live at home

It doesn’t sound as fun as living in a dorm—but it’s a lot less expensive.  By living with parents, students can avoid paying rent, laundry bills, and utilities, and they may be able to opt out of the school’s meal plan.  This can save you thousands per year on living expenses.

Go to school online

Online schools have significant cost advantages over traditional schools.  They don’t require you to sign up for a meal plan or live in a dorm.  You don’t have to move to an expensive college neighborhood—you can stay in a neighborhood you can afford.  And you don’t have to worry about transportation costs.  Even better, online colleges are flexible—meaning you can work full-time while you attend school.  This may make it more possible for you to pay tuition while you attend, rather than putting it off with expensive loans. Start your search for an online school.

Buy a house and rent it out

You can pay your loans while you’re in school by buying—or having your parents buy—a multi-room house near your college and renting the rooms to other students.  The rent should be high enough to cover your mortgage, repairs, and other home costs, as well as leaving enough to pay back some of your college tuition debt.  It’s often smart to rent by the room, as you can earn more overall than by renting to a single person or family.

Student loan debt can be debilitating.  But if you take steps to reduce it while you’re in college, you may be able to graduate with a more manageable debt load—or no debt at all.  It’s never too early to start developing strategies to reduce your student debt.




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