It’s difficult for many students to get through college without taking out a student loan or two, but minimizing the borrowing is part of an important strategy for college planning and the future.
After all, who wants to be saddled with loan repayments that greatly reduce income when entering the working world? There are plenty of ways to lower student loans without interfering with education or the enjoyment of college life.
Here are six strategies for minimizing student loans:
1. Choose federal student loans — Private loans often have higher rates that significantly increase interest during the school years, according to CNBC. Federal loans also have forgiveness and deferment programs not available to private loans borrowers.
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2. Attend a cheaper college — This will reduce debt in the future. Talking about college expenses between parents and students is part of a long-term savings strategy. Lower tuition can often be found through colleges that offer cheaper prices for in-state residents.
3. Saving — Putting a small amount of money away each month can add up and reduce student loan repayment over time. One simple strategy involves placing all $5 bills in a jar and depositing them into a bank account at the end of the month for loan repayment. This could cut four years off a 20-year repayment loan, which saves thousands of dollars in interest, according to U.S. News.
4. Graduate early — Formulating classes and as many credits per semester as possible could get a student out of school faster and minimize student loans. Another idea is to take classes in high school that qualify for college credits, perhaps turning four years of college into three, according to Robert Farrington in Forbes.
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5. Reduce living expenses — College living can be fun, but handling more than tuition with a student loan is not always a good idea. Some ways to cut costs include reducing dining and entertainment expenses, living at home if possible, and renting instead of buying textbooks.
6. Plan on volunteering — After graduating, some nonprofit programs will pay volunteers a certain amount an hour that goes toward student loan repayment, U.S. News explains. SponsorChange is among the sponsors that have developed a model for such volunteer projects. AmeriCorps and Peace Corps have student loan forgiveness programs, as does the Military Student Loan Forgiveness Program for those who served in the military, according to Zing! by Quicken Loans.
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