Avoiding school debt, before and during college

How do you fulfill your dream degree without piling up school debt? Here are some ways to deal with student loan debt before it starts:

• Save before you start your education
• Only take what you need in student loans
• Prioritize repayment to reduce interest expenses
• Make the most of your time as a student
• Budget while in school to keep debt down
• Get free financial guidance from the experts

How can I save before I get to college?

Earn college credit in high school

Consider taking AP classes or college classes while in high school. Dual enrollment programs like Running Start allow eligible students to enroll in college while in high school. The result: tuition-free credit that counts toward both high school and college requirements.

Consider options close to home

Out-of-state tuition at public universities can be 3x more than an in-state rates. And if you attend college close to home, weigh the costs of living on-campus. While independence is tempting, living at home while attending school could reap big savings.

Apply for as many scholarships as you can

Every dollar you secure in scholarships is one fewer you have to pay! There are several places to search for scholarships:

• Numerica scholarships
• University scholarships
• Community scholarships (check with service clubs and similar organizations)
• Local business scholarships
• Free websites like finaid.org

Work while you’re a student

Get a part-time job to help with your expenses. The more you work and save, the less you’ll have to borrow in student loans. The more you can save before starting college, the less student debt you’ll wind up with. (Your future, graduated self is going to thank you.) Who knows, that part-time job could help you find your passion and potential career.

Once you’re in school, explore on or off campus job opportunities. Work study allows you to find a job on campus to pay your tuition bill. The program may have financial aid requirements, depending on the school.

Getting a job off campus may pay better. Keep your eyes open for employers who offer tuition assistance.

Only take what you need in student loans

While scholarships and grants are essentially free money (you don’t need to pay them back), loans are a different story.  Approach them with caution.

The golden rule with student loans is “only take what you need.” It’s tempting to take the loans offered to you, but you are responsible to pay it back. This is true even if you don't graduate with a degree.

Pay back loans ASAP

If you can start paying your loans while you’re still in college, do it. Even if it’s just a little each month. Repayment typically begins 6 months after you leave school. That's when interest kicks in. Pay as much back as you can before this. It could save you hundreds of dollars in interest.

Make the most of your time as a student

Work with an adviser to make sure you are attending the right classes to graduate on time. If you’re not sure what you want to major in, fill your schedule with core classes you'll need no matter what.

Get good grades in your classes so you don’t have to repeat them. No one wants to pay for a class a second time. In addition, many scholarships are GPA-dependent, so that “free” money isn’t free if you don’t keep your grades up.

Learn to live within a budget

Using a spending plan is important, especially if you have student loans. The first step to creating a budget is to understand where your money is actually going. Use a budgeting app or complete our budget workbook to start getting a handle on your finances.

To find savings:

• Buy used textbooks or look for cheaper options. Sometimes, you’ll be able to check out the textbooks you need at the school’s library. Consider e-books instead of physical books.
• Get creative! DIY decorating ideas for your college dorm or first apartment can be a fun way to save money before setting out on your own.
• Think about your transportation options. Owning a car means paying for insurance, gas, and maintenance expenses. Would you be OK riding the bus or walking during this phase of life? It could save you a lot of money.

Bottom line, using a spending plan is key to lessen your reliance on student loans. It will also help you pay off student loan debt after school.

Ask the experts

The financial aid office at your school is a great resource for getting information pertinent to your situation.

If you’re considering a student loan or need help with your budget, talk to our partners at GreenPath. GreenPath provides free, expert advice personalized to your situation from certified financial counselors.