Published in: Student Loans | Nov. 2, 2019

7 Ways to Minimize the Student Loans You Need to Borrow

By:  Kailey Hagen

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Minimizing your student loans now can go a long way toward reducing your financial stress after graduation.

Student loans suck. They’re expensive, often inflexible, and they put a lot of stress on new college graduates who are only just getting started in their careers. They also make it more difficult for graduates to save for other long-term goals, like a down payment on a home. But with careful planning, you can minimize the amount of student loans you need to borrow and reduce the financial burden of these loans. Here are seven ideas to get you started.

Mother helping child diligently study.

Image source: Getty Images

1. Apply for grants and scholarships

Grants and scholarships are superb ways to pay for college because you don’t have to pay them back. They’re essentially free money for your education. But you have to apply for them first. Fill out the Free Application for Federal Student Aid (FAFSA) to see what kind of government assistance you might qualify for. Also, apply for scholarships at your high school and the university you plan to attend. You may also be able to find scholarships online. Apply for any you think you may qualify for. Every dollar you receive in scholarships and grants reduces the amount you must borrow in student loans.

2. Try to get college credits before you get to college

I was able to shave an entire year off of my college education by taking advanced placement (AP) exams and college courses at my local community college during my senior year of high school. It was much cheaper to take these classes close to home than it would have been at the university I later attended, and passing the AP exams enabled me to earn some college credits without taking a college course at all.

If you’re considering this route, make sure that you can transfer the credits for any college courses you take. Otherwise, you may just end up spending money for no reason. Check with the university you plan to attend first to find out whether it accepts college credits from AP exams, your local community college, or an online university.

3. Save as much as you can before college

Your parents may save money for college on your behalf in a college savings account, like a Coverdell ESA or 529 plan. You could also set aside money in a traditional savings account or an investment account. If you work a part-time job, budget a certain amount of your monthly paychecks toward your college expenses. 

If you don’t know how much you should be budgeting, do some research into the costs of your chosen university. Schools typically list the average cost of attendance, but you have to pay attention to more than just tuition. Think about books, supplies, housing, and food costs as well.

4. Work while in school

Plan to get a part-time job while you’re in college to help you cover your expenses. This could be a job somewhere on your university’s campus or a side business you start on your own, like tutoring or helping other students repair their broken computers. 

It’s up to you to decide how much time you can afford to devote to work, but aim to work at least a little bit every week to keep a steady flow of cash coming in. It’s fine to spend some of this money on entertainment, but allot a certain amount to your education expenses and set this aside first.

5. Try to minimize your cost of living

You may not have much say in how much your tuition costs, but you can control how much you’re spending on housing, dining out, and other living expenses. Living frugally isn't as much fun as spending without a care, but it’ll enable you to have more financial freedom once you graduate because you won’t have to pay as much in student loan debt.

Look into housing, food, and entertainment costs in the area around your school and estimate how much you’ll spend on these expenses. Even if you do end up borrowing some money to cover your living expenses in college, you can reduce this amount quite a bit by choosing a more affordable place to live.

6. Choose a more affordable university

If you don’t have your heart set on a particular university or program, go with the one that costs the least. Staying in your home state helps because most states offer lower tuition costs to in-state residents. Attending a local community college, even if it’s just for a couple of years while you complete your general education requirements, can also help reduce your college tuition and living expenses.

7. Look for a school that offers tuition installment plans

There are cases when you might ultimately be able to pay for your college education on your own, but don't have all the cash you need to pay for the semester’s tuition up front. Some universities are now offering tuition installment plans to help students pay for their education more easily without taking out loans. 

These installment plans require you to pay a certain amount for tuition each month. Some may charge you fees and interest -- but some do not -- and this can be a more affordable way to finance your education if you’re able to cover the monthly payments.

Every student’s situation is different and you may not be able to employ every suggestion on this list. But do what you can. Saving $100 a month for college or taking one community college course may not seem like it’ll make much of a difference, but every little bit helps.

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