10 Tips On Reducing Student Loan Debt

Reducing Student Loan Debt Before or While Attending College

Managing student loan debt doesn’t have to be overwhelming. Whether you’re preparing to borrow or already repaying, there are smart strategies that can help you minimize what you owe and stay in control of your finances. Below, we’ve outlined 10 practical tips to help you borrow more wisely and reduce your student loan burden — starting now.
1. Use free money.
Exhaust all of your free money for college options, such as scholarships and grants for college. These do not need to be repaid, making them the best source of funding. Start your search early and apply often — many students miss out simply because they don’t know what’s available. Look for merit-based, need-based, and niche scholarships based on your background, interests, or field of study.

2. Start saving early.
Parents and/or students can create a savings account or invest money in tax-sheltered funds like 529 plans early on, to prevent having to take out large sums in student loans. Even small, regular contributions can grow significantly over time thanks to compound interest. Encourage early saving through birthday gifts, part-time income, or family contributions.

3. Work while attending college.
Consider a part-time or even a full-time job to help cover college expenses. Campus jobs and federal work-study programs often offer flexible schedules that prioritize student needs. Working even 10–15 hours a week can reduce how much you borrow — and teach valuable time management and budgeting skills.

4. Choose your school carefully.
Weigh your options when choosing what college or university to attend. Many students can complete their general education requirements at a community college for a fraction of the cost, then transfer to a four-year institution to finish their degree. Don’t just focus on the school’s name — compare tuition costs, aid packages, graduation rates, and average debt upon graduation.

5. Federal over private.
Always choose federal student loans over private student loans. Federal loans offer fixed interest rates, income-driven repayment plans, deferment options, and potential loan forgiveness. Many students miss out by skipping the FAFSA — even if you think you won’t qualify for aid, filing can still unlock low-cost federal loans.

6. Consider CLEP.
Don’t take out student loans for knowledge you already have. The College-Level Examination Program (CLEP) lets students earn college credit by passing exams in subjects they’ve already mastered. This could save you thousands on tuition and reduce the number of credits needed to graduate. It’s ideal for adult learners, military members, and students with strong high school or real-world experience.

7. Have a definitive path.
Many college graduates carry debt from courses that didn’t count toward their final degree. Before borrowing for college, take time to explore your career goals and interests. Declaring a major with confidence can help you stay on track, avoid costly course changes, and finish school faster — which means borrowing less overall.

8. Do your research.
Loan terms, interest rates, and repayment options vary greatly between lenders. Before committing, compare multiple student loan options and ask detailed questions about fees, deferment policies, and cosigner release options. A few hours of research can save you thousands of dollars over the life of the loan.

9. Consider a cosigner.
If you need to take out private student loans and your credit history isn’t strong, applying with a creditworthy cosigner can improve your chances of approval and secure a lower interest rate. A lower rate means lower monthly payments and less interest over time. Just make sure your cosigner understands the risks — they’re equally responsible for the loan.

10. Ask questions and get informed.
Don’t be afraid to seek guidance from financial aid professionals, school counselors, and trusted financial resources. Understanding how student loans work before you borrow empowers you to make smarter choices. Use resources available at your high school, college financial aid office, and online tools like calculators, loan estimators, and official FAFSA help guides.

Reducing Student Loan Debt After Attending College

Reducing student loan debt can be a significant challenge, but there are several strategies you can consider to help manage and ultimately reduce your debt burden. By implementing these strategies and staying proactive about managing your student loan debt, you can work towards reducing your debt burden and achieving financial stability.

1. Make Extra Payments.
If you have the means, consider making extra payments toward your student loans — even small ones. Applying just a little extra to your principal each month can reduce the total interest you pay and shorten your repayment timeline. Be sure to tell your loan servicer to apply extra payments directly to the principal (not just to your next due date).

2. Focus on High-Interest Loans First.
Using the “avalanche method,” target the loans with the highest interest rates first while continuing to make minimum payments on your others. This strategy minimizes how much interest accrues over time and helps you eliminate your most expensive debt faster.

3. Explore Refinancing or Consolidation.
Refinancing can be a smart move if you have good credit and want to lower your interest rate or monthly payment by replacing multiple loans with one new private loan. Federal loan consolidation, on the other hand, lets you combine multiple federal loans into a single loan with a fixed rate. Keep in mind: refinancing federal loans with a private lender removes access to income-driven repayment and forgiveness options, so weigh the trade-offs carefully.

4. Take Advantage of Employer Benefits.
More employers are offering student loan repayment assistance as part of their benefits packages. Some contribute a set monthly amount or offer lump-sum payments toward your loan balance. Check with your HR department or benefits portal to see what’s available — you could be leaving free money on the table.

5. Utilize Loan Forgiveness Programs.
Depending on your career and employer, you may qualify for federal loan forgiveness programs like Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness. PSLF forgives the remaining balance on Direct Loans after 10 years of qualifying payments while working in public service. Make sure you’re enrolled in an eligible repayment plan and understand the program requirements to stay on track for forgiveness.

6. Consider Income-Driven Repayment Plans.
If your monthly loan payments feel unmanageable, income-driven repayment (IDR) plans can cap your payments based on your income and family size. Plans like IBR, PAYE, and SAVE (formerly REPAYE) may reduce your monthly bill to as low as $0, with forgiveness after 20–25 years of qualifying payments. These plans are especially helpful for borrowers with lower income or high debt-to-income ratios.

7. Seek Additional Sources of Income.
Adding a side hustle or freelance gig can give you extra income to chip away at your loans faster. Whether it’s tutoring, delivery driving, remote work, or selling digital products, using side income to make extra loan payments can significantly accelerate your payoff timeline.

8. Live Frugally and Budget Wisely.
Take a close look at your monthly expenses and identify areas where you can cut back. Create a realistic budget that prioritizes loan payments and minimizes unnecessary spending. Even modest lifestyle changes — like cutting subscriptions or cooking at home — can free up funds to put toward debt reduction.

9. Seek Financial Counseling.
If you’re overwhelmed or unsure where to start, speaking with a financial counselor can help you build a personalized strategy. Certified nonprofit credit counselors or student loan advisors can guide you through your repayment options, help you avoid mistakes, and offer peace of mind with a clear action plan.