Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
* * *
A lot of planning and preparation goes into figuring out how to pay for school. Many students use a combination of savings, scholarships and student loans to cover costs.
But that planning shouldn’t stop once you enroll — there’s a lot you can do to pay down student loan interest or make money from a part-time job while you’re studying for your degree.
How to pay for school after you’ve already enrolled
Here are seven different ways college students can reduce expenses, make money and lower their debt loads while still in school:
1. Borrow only what you need
2. Live like a student
3. Take on freelance work or a side hustle
4. Pay student loan interest payments
5. Apply for scholarships and grants
6. Negotiate lower tuition
7. Consider community college classes
Don’t view student loans as free money. They do come at a price, and the more money you borrow, the longer you’ll have to work to pay them off.
When determining how to pay for college tuition, start by estimating your total cost of living. That should include your tuition, food and room and board, as well as hidden college costs such as class supplies, lab fees and late-night pizza runs. Borrow only the bare minimum to cover your essential expenses, even if you’re approved for more than what you require.
“I didn’t borrow for my lifestyle expenses,” Ogechi Igbokwe, founder of OneSavvyDollar said when explaining how she graduated with less than half the national average student loan debt for a graduate and undergraduate degree. “I only borrowed the amount I needed.”
Consider following these specific steps to return part of your student loan if you’ve borrowed too much.
The phrase “broke college student” exists for a reason. If you can keep your expenses as low as possible while you’re in school, you can save up and avoid spending your student loan money on nonessentials.
To avoid spending more than you need:
- Opt for a roommate to save money on rent. According to real estate listing and housing data site Trulia, a renter could save an average of 13% of their income by getting a roommate in America’s largest rental markets.
- Cook at home instead of eating out every day. Eating out gets expensive; save money by opting to stay home and cook.
- Live on a budget. Personal finance expert Dave Ramsey recommends a zero-based budget, in which you give every dollar you have a job. This means allocating money for savings and expenses, so every dollar of your income is accounted for.
- Remind yourself that this is only for a short period. Focus on the fact you’ll be able to live better once you’ve graduated with minimal or no debt.
Living like a student now will help you minimize your debt load later. That way, you don’t have to struggle financially once you’re in the real world.
In addition to lowering your monthly expenses, do what you can to create extra streams of income. Even a few hundred dollars a month can make a huge difference to your student loan debt while in college, and you can easily earn at least some money if you take on freelance work and side gigs in addition to a regular job or full-time class load. Side hustles are a great way to pay for college, especially if you can find a side gig that pays you $50 an hour or more.
As a freelancer, you can take on as much or as little work as you have time for. You can also work with a variety of services, such as blogging, web designing and photography. Sometimes, this will both help you to repay tuition and open up the door to career opportunities.
“I got into photography and started a blog called Gridfiti,” Nick Le said. Le was able to turn his blogging side gig into a full-time job after graduating, since running his blog taught him how to develop his social media account, build brand partnerships and make affiliate commissions from Amazon purchases.
Brush up on your skills and see what you can offer in exchange for extra income. You can even choose freelance work that helps further your education by getting paid to learn a new skill or working with a mentor.
Even though you don’t have to start making student loan payments until you graduate college (in most cases), it’s still a good idea to pay the interest on unsubsidized and private student loans if you can. By paying the interest while in school, you can avoid having your loan balance grow larger due to interest accruing.
Find out whether your lender offers the option to pay the interest due on your student loans. By keeping your balance as low as possible, it will be easier to afford monthly student loan payments after graduation.
Scholarships and grants offer amazing benefits to college students who qualify. You could end up getting a college education for free if you’re successful at getting enough scholarship and grant money.
Regardless of what year of college you’re in, you should continuously search for scholarships and grants. This is a great option when considering how to pay for school because it’s money you don’t have to repay.
“I applied for a lot of bursaries and scholarships, and surprisingly got accepted for a lot of them,” Le said. “If I were to go back, I would’ve treated this like a job because I only started doing this in my second and third year of university. I know friends that almost paid their full tuition doing this.”
Visit your financial aid department to research different scholarships, awards and grants that you could qualify for. Browse your local paper and community bulletin board for organizations and companies in your area that may offer financial aid for college students.
You should also check out groups and organizations that you or your parents may be a part of — they may offer small grants for college students.
If you don’t bring up the topic of reducing your tuition, your chosen school won’t automatically offer options. Don’t be afraid to get into a discussion when you’re deciding how to pay tuition.
Your school may be willing to offer discounts on housing, or the opportunity to work part-time in exchange for discounted tuition. Some schools also offer work-study opportunities, even if they can’t offer discounts on tuition. A work-study program will give you the chance to earn money in exchange for aid in paying tuition and other college-related costs.
These jobs could be on campus working for the school directly, or working off-campus for private organizations. Your college may also offer opportunities for community service and work-related programs as part of your course study.
Community colleges usually offer much cheaper tuition and living costs for students earning college credits. To make your college costs cheaper, see if you can complete any of your prerequisites at a community college.
“I started off at a community college and transferred to a four-year college, in-state,” Igbokwe said. “[That] was also crucial to reducing the costs.”
Igbokwe took advantage of community college courses when earning both an undergraduate and graduate degree. “When it came time to pursue my master’s in accounting, I went back to the community college and took my prerequisites before transferring to another state school in New York.”
By staying close to home and potentially living with your parents, you can save a lot of money and get much closer to earning your degree. Then, after a few years, you can head off to a larger university or out-of-state college to finish your schooling without taking on nearly as much debt.
Final thoughts on how to pay tuition and other expenses while enrolled
There are so many options available when you’re researching how to pay for school — you just need to decide what strategies will work best for your financial situation.
Use these tips to minimize student loan debt (and make in-school payments when you can), and you’ll be able to reduce the financial strain while still getting a great education.
Rebecca Safier contributed to this report.
Need a student loan?Here are our top student loan lenders of 2020!
|1.09% – 11.98%1||Undergraduate, Graduate, and Parents|
|1.25% – 11.10%*,2||Undergraduate and Graduate|
|1.24% – 11.99%3||Undergraduate and Graduate|
|1.05% – 11.44%4||Undergraduate, Graduate, and Parents|
|1.78% – 11.89%5||Undergraduate and Graduate|
|2.69% – 12.98%6||Undergraduate and Graduate|
|3.52% – 9.50%7||Undergraduate and Graduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. |
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/2/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
4 Important Disclosures for Earnest.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.88% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.78% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.95% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.88% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/04/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
6 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicant’s ability to supply the necessary information for submission.
7 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.17% effective Sep 1, 2020 and may increase after consummation.