Reduce Student Loan Debt While in College

Mar 10, 2021 4 min read

Picking a college is a big decision, and as graduation gets closer you might wonder how you’ll pay for it (outside of savings, grants and scholarships). For many, student loans play a big role in funding their higher education. In fact, in the US, the cost of a college education is the second-largest household expense — behind buying a house. This is in part due to the rising cost of college. In the past decade, the cost of college has increased by more than 25%. Graduating with a mountain of debt can make starting the next chapter more difficult. The good news is there are solutions for reducing student loan debt that can help you minimize the amount you take on.

13 Strategies for Reducing Your Student Loan Debt

1. Start in High School

By taking advanced placement (AP) courses or special exams, you may be able to get a head start in earning college credit. Every credit you can earn early reduces the expense once you are officially a college student.

2. Choose Your School Carefully

The price tag of your dream school might not be worth the cost. Before you choose a school, be sure to compare the costs and academic programs. You can reduce student loans dramatically if you consider going to a community college to take care of general education requirements before going to a university.

3. Apply for Financial Aid

There are a variety of sources for scholarships and grants, including federal and state government, educational institutions and a variety of private organizations. The broad range of aid may be based on financial need or merit. Your background, employment history, membership in clubs, nationality or exceptional talent (as a writer, scientist, musician, athlete, etc.) may help you meet eligibility requirements. To learn about available scholarship and grant opportunities, ask your school career counselor, visit your local reference librarian or go online.

There may also be education assistance available from your parents’ employers. Some companies offer tuition reimbursement or company scholarships. Their human resources department will have any relevant information.

4. Ask About Discounts

Some colleges may offer discount programs. For example, a school may offer a discount if you pay the entire semester’s bill up-front or if you allow the money to be directly withdrawn from your bank account. If you have a parent who attended your school, don’t forget to ask about discounts for children of alumni.  

5. Live at Home

Although living at home means you’ll miss out on the on-campus living experience, you’ll dramatically reduce your expenses. Just think of how much money you’ll save by not paying on-campus room and board. The average cost of room and board per year is $8,887 for public colleges and universities and $10,089 for private colleges and universities. However, be sure you take into account the cost of commuting and parking as you determine the best option for your situation.

You may be able to further reduce expenses through distance learning. You won’t have the commuting costs, and some schools offer reduced tuition for distance learners. You can do this for general education credits then easily transition to in-person classes at the same school.

6. Become a Resident Assistant

If living at home isn’t an option, look into your school’s resident assistant (RA) program. In general, RAs act as on-site resources for other students living in the dorms. RAs are able to minimize costs associated with living on campus by receiving free room and board. Many schools even provide a monthly stipend as a bonus for personal expenses. You’ll take on more responsibility but reduce the amount of loans you’ll need.

7. Get a Part-Time Job

Having a job while in school can be tricky, but can also be a helpful solution for paying for college on your own while you’re still in school. You’ll need to find a job that will work around your class schedule. But the money you make from your job can be used to reduce your student loan debt, covering living expenses or tuition payments while you’re still in school.

Look into the option of cooperative education. Some colleges allow students to alternate semesters of education with semesters of full-time work in a field related to their major. A co-op degree usually takes about five years to complete; however, not only will you have income to offset your college expenses, you will also have a history of relevant work experience that will help make you attractive to employers.

8. Enroll in Government Military Programs

In return for military service, you can receive educational benefits. You can attend a service academy to receive an education, participate in the Reserve Officers’ Training Program while in college, or attend college on the Government Issue (GI) Bill after an honorable discharge from the military. Depending on the program, to qualify for these benefits you will be required to serve between three and five years of active military duty.

Not only does military service help lower the cost of secondary education, the skills learned through service make veterans very attractive hires for many employers.

9. Stick to Your Graduation Timeline

Changing your major multiple times can extend your graduation timeline and add years of study. The more years it takes you to finish your degree, the more debt you’ll have.

10. Borrow Only What You Need

It may be tempting to borrow more than you need. Before you borrow, figure out exactly how much you’ll need for tuition, books, room and board, etc. It’s also a good idea to know how much you’ll repay. Creating a budget and knowing how much you’ll be repaying helps create awareness of how much debt you’ll have in several years.

11. Pick Loans Wisely

Interest rates vary. Before you take out a loan, be sure to take advantage of loans with lower interest rates. Private loans generally have higher rates and may allow compounding. Federal loans can be more attractive than private loans. Interest rates can increase your overall expenses over time if you don’t choose carefully. You can reduce student loan debt by a significant amount by taking the time to understand what rates you’re applying for.

12. Pay Interest on Unsubsidized Loans

Paying interest on unsubsidized loans while you’re in-school or during grace periods can help prevent your loan amount from growing.

13. Save on Textbooks

Tuition and room/board aren’t the only college expenses you’ll have. Depending on your classes, the cost of textbooks can quickly add up, especially if you buy new. Recent information from College Board found students spent approximately $1,290 on textbooks and supplies per year. Buying used textbooks, opting for a digital version, or sharing with a classmate can help reduce costs. You can also check the school’s library to see if required books are available for check out or if you can use them while in the library.

Resell your books at the end of the semester to recoup some of your money. Finding a buyer on your own could result in higher sale value than if you took them back to the campus bookstore.

Plan for the Future

Heading off to college is an exciting time but figuring out how to pay for it can be stressful. Your local Farm Bureau agent or advisor can help you develop a college funding strategy. Connect with an agent or advisor today.


Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.