Five Ways to Reduce College Debt

Five Ways to Reduce College Debt

For a majority of students, going to college and accumulating debt goes hand in hand. That is, if you don’t have a family who can afford your education or you are not eligible for a full scholarship.  You have no choice but to figure out ways to reduce college debt.

Delay starting college

You can wait a few years before going to college and get a job.  If you can still live at home, you should be able to save for all or at least part of your tuition fees.  You might not get your dream job with only a high school diploma, but you will earn income.

Compare colleges

One of the ways to reduce college debt is to pick a local college versus a more expensive one out-of-state.  By picking a local college, you’ll save on boarding and the cost of living.  This decision alone can save you thousands of dollars each year.

If you have no choice in the matter, and you need to live away from home, get a dormitory room on campus or share an apartment off campus with other students to save money.

When considering local colleges, compare their course structure and how much they charge for each credit.  One college may be cheaper than the other with little difference in course quality.  If you have your heart set on graduating from a particular college, start your studies in a less expensive college and after one or two years have your credits transferred to the other one.

Explore your options

Before you talk to a bank about a loan, talk to the college administrator about their grants program.  Some grants amount to several thousand dollars and don’t need to be paid back.

If you do need to take out a loan, don’t wait until you graduate to start making payments.  Loans accrue interest. Even if you can only manage to pay off the interest, you’ll avoid having the loan snowball into a giant amount when you graduate.

Textbooks and materials

Give preference to used textbooks, keep them in good condition and sell them when you’re done with them.  If you’re planning on majoring in history, you might want to keep those books.  But why save books and materials from other courses if you won’t be using them.

Alternatively, you can try shopping online or get electronic textbooks when available.

After Graduation

If you don’t have a job already, get one as soon as possible.  Don’t hold out for a career in your degreed field.  Even if a potential job is not what you studied for, a salary earned as soon as possible will enable you to pay off your loans. 

If you have a job, but you’re not used to handling money, get someone to help you budget.  It’s easy to be tempted into having fun after studying for four years.  You can still make paying off your college debt a priority and enjoy your life as well.  It’s a good idea to talk to someone who can help you plan a budget and give you the benefit of their financial guidance.

If you have multiple loans, talk to your bank about consolidating your debt.  With all of your financial eggs in one basket, they might be willing to negotiate a better interest rate.

One of the smart ways to reduce college debt is by paying your loans on time, and if possible, paying more than the required amount.  If nothing else, seeing the amount of your loan go down will motivate you to keep making those payments.