Reduce Student Loan Debt While in College

Mar 26, 2024 6 min read

Attending college is a major decision that can impact your finances for years, but completing a bachelor’s degree can boost your earning potential. According to the Association of Public Land-Grant Universities, workers with a bachelor’s degree earn 84% more than those who ended their education with a high school diploma. That can add up to $1.2 million more over a lifetime. 

Yet, finding the money to pay for that degree can be a challenge. You may be able to fund part of your education with savings, grants and scholarships. But for many college students, loans play a significant role in funding their higher education. 

Because of the rising cost of college, many students have no choice but to turn to loans to pay their tuition bills. In the past five years, the cost of attending college has increased by an average of 17% a year, according to Education Data Initiative. Graduating with a mountain of debt can make starting the next chapter more difficult. The good news is there are solutions for student debt that can help you minimize the amount you borrow.

13 Strategies for Reducing Your Student Loan Debt

1. Start in High School

By taking advanced placement (AP) courses, special exams or dual enrollment courses (where you get college credit for a class you take in high school), 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. If you’re wondering how to avoid debt in college, you can reduce student loans dramatically if you consider going to a community college to take care of general education requirements before attending a university. It’s also generally less expensive to attend an in-school public university rather than a private university or a public university in another state.

3. Apply for Financial Aid

There are a variety of sources for scholarships and grants that are offered by the federal and state governments, educational institutions and a variety of private organizations. Aid may be based on financial need or merit. Your background, employment history, club memberships, nationality or 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 start with these tips from Federal Student Aid. To apply for many sources of financial aid, you’ll need to fill out the FAFSA (Free Application for Federal Student Aid) form.

There may also be educational assistance available from your parents’ employers. Some companies offer tuition reimbursement or company scholarships. Ask them to check with their human resources department for 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, if you allow the money to be directly withdrawn from your bank account or if you have siblings attending the school. If you have a parent who attended your school, don’t forget to ask about discounts for children of alums.  

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 for on-campus room and board. According to the Education Data Initiative, the average cost of room and board per year is $11,520 at public universities and $13,028 at private institutions. Even when you factor in commuting and parking costs, you’ll likely save a lot of money if you live at home. 

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 transition to in-person classes at the same school to complete your degree.

6. Become a Resident Assistant

If living at home isn’t an option, consider your school’s resident assistant (RA) program. In general, RAs act as on-site resources for other students living in the dorms. RAs typically minimize costs associated with living on campus by receiving free room and board. Many schools even provide a monthly stipend for personal expenses. 

As an RA, you’ll take on more responsibility but reduce the amount of loans you’ll need. However, at many schools, you don’t have the option to be an RA until at least your second year of college.

7. Get a Part-Time Job

Having a job while you’re in school can be tricky, but it can also be a helpful solution for paying for college on your own. You’ll need to find a job that will work around your class schedule. Working part-time on campus may be a good option, since these positions are often designed with the challenges of balancing schoolwork and paid employment in mind. 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 as well. 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. But it provides income to offset your college expenses as well as a history of relevant work experience that will help make you attractive to employers after you graduate. 

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 (ROTC) while in college or attend college on the Government Issue (GI) Bill after an honorable discharge from the military. Depending on the program, you will be required to serve between three and five years of active military duty to qualify for these benefits.

Not only does military service help lower the cost of secondary education, but 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. Even if you don’t change your major, you need a good plan for the classes you will take each semester. Otherwise, you could find that you can’t enroll in a class you need because you didn’t take a prerequisite or it’s not offered when you want to enroll. 

The more years it takes you to finish your degree, the more debt you’ll have. It can help to work closely with your advisor to make sure you’re on track to complete your degree on time.

If you’re at risk for a longer timeline than you would like, see if you can take summer, evening or online classes to help you catch up. You may even be able to take an online course at another school and transfer the credits. 

10. Borrow Only What You Need

Before you take out a loan, 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 have to 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. It can be tempting to borrow more than you need, but knowing how much more that will cost you over time can help you rein in your loan amounts.

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

Interest isn’t added to subsidized loans when you are in school, and you may qualify for these loans based on your own or your family’s financial situation. With unsubsidized loans, the interest accrues when you are in school. Paying the interest on your 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 ones. Recent information from Best Colleges found students spent approximately $1,215 on textbooks and supplies per year

Buying used textbooks, renting 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 checkout or if you can use them while you’re in the library.

You can often 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 work with you to help you learn how to minimize student loan debt. That way, you can develop a college funding strategy that will help you afford an education that can power your future. Connect with an agent or advisor today.

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