Keeping Your Student Loan Debt Low While In School: Six Tips

Many students don’t worry about debt until they graduate college, use up their grace period, and start getting monthly bills. It’s easy to assume you’ll get a good job as soon as you graduate that will make student loan debt disappear, but many people aren’t that lucky—it might take years to get a job that pays enough to make a dent in your debt. It’s never too early to think about managing the debt you’ll be facing when you graduate college. Here are a few things you can do to lower your future student debt while you’re still in school.

Get a job. When you’re in school full-time, it’s often difficult to hold down a full-time job as well. But if you have no income, that means you’re more likely to rely on loans or your credit cards for living expenses including bills, food, entertainment, books and supplies. This can add significantly to your debt load when you graduate. Instead, get a part-time job while you’re in school. If you’re in school online, you’ll have greater flexibility—you may be able to land or keep a full-time job. If you work while going to school, you’ll be able to pay for living expenses and hopefully start paying down your tuition while you study.

Get good grades. Many schools offer merit-based scholarships for second, third, and fourth-year students who do outstanding work and show promise. Earning good grades may get you grants and scholarships, but earning bad grades will almost certainly cause you trouble. Many scholarships offered directly through schools require students to keep their grades above a certain average, and if you fall too low, you may have to retake credits—which can be costly and time-consuming.

Keep an eye out for scholarships. There are always scholarships available to help students while they study. Targeted scholarships are out there for every subject, from science to creative writing. Some will be offered through your school, but many are offered through private funding institutions, community organizations and even corporations.

Go online to Finaid, the College Board or FastWeb to do a search for scholarships available to you—and don’t stop there. You should also check with your professors, leaders of community or extracurricular organizations you belong to, and the companies you, your parents or family members work for to see if they offer scholarships you may have overlooked.

Apply for Federal aid. It’s never a good idea to forget about the FAFSA. Apply early—a lot of funding is offered first-come, first-served, and schools start taking applications on the first of the year for the following academic year. The FAFSA is your passport to Federal grants and loans with low fixed interest rates—the more Federal aid you get, the fewer private loans you’ll need. Be sure to ask your admissions counselor whether the school is offering as much Federal aid as you’re qualified for in your financial aid package.

Use credit cards sparingly. Many students get in hot water with credit cards, and it’s not entirely their fault—traditional students often have very little prior experience with credit cards, and companies encourage students to think of the cards as free cash. This is not the case. Some students make the decision not to have a credit card altogether, and if you’re a traditional student, this isn’t a bad idea. If you do have a credit card, use it sparingly and only for emergencies—and never spend more than you’ll be able to pay back in a month.

Keep your costs low. A lot of debt can be avoided by keeping costs down while in school. If you don’t need a car to get to class or work, don’t own one—and bear in mind that owning a car just to get to work might be costing you as much in gas, auto loan payments, repairs and other expenses as you’re earning. Always buy your books used, and avoid discretionary spending as much as you can. If you keep your costs down in school, you won’t get stuck with a big bill later.

Student loan debt can be a huge burden. But with a little planning and foresight, you can bring your debt to a manageable level before you get your diploma. Keep your costs low, avoid using credit cards, and get as much aid as possible in grants and low-interest Federal loans, and hopefully your debt won’t keep you awake at night when you graduate.