How to Reduce Your Mounting Student Loan Debt Levels

As an adult with a pile of student loan debt, I am constantly thinking about how I’m going to get out from under what I feel is a huge obligation. For many people, getting a college degree is synonymous with going deeply into debt. Even worse, according to, you can forget about out filing bankruptcy to get out of your student loans, because, with the exception of a few rare hardship cases, most people have to pay bank their student loans no matter what their financial situation is. One of the best plans for reducing your student loan burden is to take a proactive approach and work on cutting the amount of money you have to borrow as early as possible during your education. The sooner you start paying back your loans, the quicker you will get out from underneath them!

Budget What You Need

Many students make the mistake of taking out the full amount they’re offered in government loans and use the extra money for living expenses. Sure, it’s a low-interest loan, but it’s one that will come back to haunt you. A better strategy is to budget your tuition, fees and estimated school expenses, such as text books, software, etc., at the beginning of every school year and only borrow as much as you need for the semesters you will be attending classes. You can pad your budget a little to be safe, but try to be as accurate as possible. If you get extra money during one semester, put it in a savings account in case you run short the next semester.

Don’t Spend That Disbursement Check

In the United States, college Financial Aid departments deduct tuition and fees from the amount of money a student accepts in loans, grants, etc. and then pays the student leftover money in the form of cash or deposits it to a special bank account with a debit card such as those offered by Higher One. Theoretically, this money should only be used for school expenses, but in reality, nobody ever actually audits what students do with their money. Instead of spending that money on frivolous things, send it back to your student loan financer. Even if you want to wait until the end of the school years, it’s always better to pay back what you can while you’re still in school.

Be a Budget Book Shopper

Many students rely on vouchers from financial aid at the campus bookstore to get their books. More often than not, this is the worst way to buy textbooks. Explore your options. Used textbooks are a frugal student’s mainstay. Another good option is to see if you can find the book cheaper on Amazon or eBay. Many textbooks are also available in Kindle versions on Amazon that are far less expensive than print versions. Last but not least, for books you have no desire to hold onto the book once the class is finished; consider renting the textbook instead of buying it. Every penny you save on books is less money you have to borrow.

Think About Community College

The first half of a four-year degree is usually just general education courses. You may be able to attend a local community college, or smaller school, for a fraction of the cost of a large university for your first two years and save a lot of money. Just make sure that your credits will transfer before you go this route. Another thing to consider is that some schools have accelerated programs for students who already have associate degrees, so it may be worthwhile to earn an associate’s degree at another school and then transfer when you’re ready to start your major.

Talk to Your Academic Advisor

What does course planning have to do with saving money on school? Well, in many cases, it has a lot to do with it. It is okay if you’re not 100% sure what major you want when you start school, but degree programs only have so many free elective spots and if you take courses willy-nilly without any idea what you’re doing, you could end up wasting a lot of borrowed money paying for classes that are ultimately useless once you finally pick a major. Work with your academic advisor to try to minimize “wasted courses” and pick classes that meet core requirements.

Work Summers

While the idea of taking classes all year long will speed up getting your degree, taking summers off and working a seasonal job will help put some money in your pocket. If you can only work part-time during the school year and you barely scrape by on that, three months of full-time work will give you a chance to put some money in the bank. If you plan wisely, you can put aside cash to help cover your college living expenses so that you’re not tempted to borrow too much money and you possibly can even make some loan payments while you’re in school.

After College

Just because you have a deferment after graduation, doesn’t mean you should wait until the last minute to make student loan payments. If you’re able to find a good job after graduation, then start making student loan payments as quickly as you can. If you’ve having trouble finding a job after graduation, then don’t just ignore your obligation. Talk to your lenders and find out if you have any forbearance or further deferment options on your loans. Lenders are much more willing to work with you if they see that you are trying to pay them back and working on the situation.

Avoiding massive student loan debt isn’t always easy, but it’s a far worse approach to just enroll in school with no game plan for dealing with it and hope that you’ll be able to sort it out later. In today’s economy, that just doesn’t work. Think before you borrow and try to actively manage your educational spending so that you don’t borrow more money than you have to. It may make going to college more difficult, but in the long run, you’ll be better off if you don’t wait until after graduation to deal with your debt.

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