We have outlined below 10 Tips on Reducing Student Loan Debt to help students borrower smarter, and make the student loan debt they may currently have more manageable.
1. Use free money.
Exhaust all of your free money for college options, such as scholarships and grants for college.
2. Start saving early.
Parents and/or students can create a savings account or invest money in tax sheltered funds (529 plans) early on, to prevent having to take out large sums in student loans.
3. Work while attending college.
Consider a part-time or even a full time job to help cover college expenses.
4. Chose your school carefully.
Weigh your options when choosing what college/university to attend. Many times you can attend a community college for the first two years at about half the cost of a state university or private college, and then transfer to the college or university of your choice to finish your degree.
5. Federal over private.
Always choose federal student loans over private student loans. Many students fail to file a FAFSA and/or exhaust all of their federal financial aid for college.
6. Consider CLEP.
Do not take out student loans for what you already know! The College-Level Examination Program (CLEP) gives you the opportunity to receive college credit for what you already know by earning qualifying scores on any of their examinations. Earn credit for knowledge you’ve acquired through independent study, prior course work, on-the-job training, professional development, cultural pursuits, or internships.
7. Have a definitive path.
Many college graduates have student loan debt from courses they did not even utilize towards their current degree. There is no harm in taking some time to think about the career path you really want to take before taking out student loans for college, make your money count!
8. Do your research.
Many times people get locked into bad student loan rates or student loans that are not as flexible as they may have anticipated. Taking some time to look over multiple student loan lenders and ask questions, is something small that can be done to save you big on student loan debt.
9. Consider a cosigner.
If you do need to take out private student loans and your credit is less than fantastic, consider doing so with a cosigner whose credit is better than yours. Even though you are approved for the private student loans, sometimes you may get a better rate if your cosigners credit is better than yours.
10. Ask questions and get informed.
Get informed by those who specialize in college financial aid and student loans, and utilize the resources at your colleges and high schools.