When most people think of how to pay for college, taking out student loans is a key part of their plan. In fact, according to Sallie Mae’s 2016 report, “How America Pays for College,” borrowed money is used to cover around 20 percent of college costs.
Taking out loans is common; 2017 student loan debt statistics show there are around 44 million student loan borrowers. Unfortunately, student loans can be costly, stressful, and cause borrowers to delay important life goals, such as buying a house or having a baby.
While many college students wait until after graduation to start tackling the problem of student loans, you don’t have to wait. Making student loan payments while you’re still in school could help you graduate with less debt.
There are plenty of great ways to keep student loan debt to a minimum while earning your degree. Here are seven different ways college students can lower their debt loads while still in school.
1. Borrow only what you need
Don’t view student loans as free money, because they come at a price. The more money you borrow, the longer you’ll have to work to pay them off. In fact, Citizens Bank’s “Millennial Graduates in Debt” study revealed most graduates who have student loan debt underestimated how much they’d have to pay each month for their loan and expect they’ll still be repaying their loans into their 40s.
When determining how to pay for college tuition, start by estimating your total cost of living. That should include your tuition, food, room and board, and 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.
2. Live like a student
The important thing to remember is why you’re in college in the first place. You’re there to learn new skills and pursue your chosen career path. You’re not attending college to spend money on unnecessary things. During this period of your life, live like a student.
“I went to a nearby (reasonably inexpensive) state university, lived at home, commuted to school, and had a part-time job,” Timothy Wiedman said. Weidman paid for two degrees without incurring student loan debt and indicated he continued to live “a bit like a monk,” while he finished his undergraduate degree.
To avoid spending more than you need:
- Opt for a roommate to save money on rent. According to Trulia, a renter could save an average of 13 percent of his income by getting a roommate in America’s largest rental markets.
- Cook at home instead of eating out every day. The average cost of each meal out is $12.75 per person, according to The Simple Dollar. Eating out just once a week could cost you $663 per year.
- 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 will be able to live better once you have graduated with minimal or no debt.
Living like a student doesn’t mean you can’t have a life in college. “Without spending much money on entertainment, I actually had a lot of fun back then,” Weidman said.
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.
3. Take on freelance work or a side hustle
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 great ways 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 under a mentor.
4. Pay student loan interest payments
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 loan company 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.
5. Apply for scholarships and grants
Scholarships and grants offer amazing benefits to college students who qualify. You could end up getting a college education for free if you are 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 college tuition 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.
Also, check out groups that you or your parents may be a part of. They may offer small grants for college students.
6. Negotiate lower tuition
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 a discussion when you’re deciding how to pay college 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 off-campus working for private organizations. “I was the editor of the yearbook for two years and received a stipend that I turned around and used to pay off my loans,” Michelle Pugh said.
Pugh also worked as a graduate assistant and adjunct teacher when earning her MBA, which allowed her to pay off her student loans while in school and graduate without debt. “I actually probably still have the loan payoff letters because I was so proud every time I finished one,” she said.
Your college may also offer opportunities for community service and work-related programs as part of your course study.
7. Consider community college classes
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.
How to pay for college while enrolled
There are so many options available when you’re researching how to pay for college tuition. You just need to decide what strategies will work best for your financial situation.
Use these tips to minimize student loan debt, and you’ll be able to reduce the financial strain while still getting a great education.
Need a student loan?Here are our top student loan lenders of 2020!
|1.24% – 11.44%1||Undergraduate, Graduate, and Parents|
|1.25% – 11.15%*,2||Undergraduate and Graduate|
|1.24% – 11.98%3||Undergraduate, Graduate, and Parents|
|1.24% – 12.49%4||Undergraduate and Graduate|
|1.80% – 11.89%5||Undergraduate and Graduate|
|2.71% – 12.99%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 Earnest.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 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 9/1/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
4 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.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.76% annual percentage rate (“APR”) (with autopay), variable rates from 1.90% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.83% APR (with autopay), variable rates from 1.80% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.98% APR (with autopay), variable rates from 1.97% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 11.26% APR (with autopay), variable rates from 1.90% 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 07/10/2020. 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.