8 tips for minimizing student loan debt

Many personal finance experts consider student loans to be good debt. That is, borrowing to purchase an asset (your education) to improve your life in the long run. And when you borrow wisely, that’s absolutely true. But it’s easy for student debt to get away from you. 

Here are eight pro tips to advance your education without taking on a heavy debt load.

1. Master your budget

College years are typically a time of spending, not a time of earning and saving. It’s especially important to keep a handle on your budget. Be sure you know where your money is going. When resources are tight, it’s a great idea to use a free budgeting app that can help you stay on track. This is the perfect time to become a budgeting boss if you’re not one already.

2. Leverage community college

Your college degree only lists where you finished your education—not where you started it. Smart students on a budget often turn to community colleges to complete their first two years of schooling. 

How much could you save? It depends on where you live. You might pay the least by choosing an in-state, public community college. Private schools cost more, and so do junior colleges out of state. According to the American Association of Community Colleges, the average in-state university tuition is about three times that of a community college. But wait; there’s more. In more than half the U.S., eligible students can attend community college for free. 

3. Minimize living expenses

You can get away with borrowing less if you live cheaply. Yes, you might dream of living it up in costly fraternity or sorority digs or getting yourself a nice off-campus apartment, and you may be able to borrow enough to make it happen. But when the party ends and the payments begin, you may have regrets. 

• It makes sense to live at home if you can. Or in a cheap apartment with a few roommates. 

• Cook your own meals. YouTube University and TikTok Tech offer tons of video demos to make easy, cheap, and tasty food. 

• Use public transportation if it’s an option. 

Your friends matter, too. Hang with students on a budget and practice loud budgeting. You’ll experience a lot less FOMO if you’re not trying to keep up with rich kids or spendaholics. 

Related: 12 practical money management tips

4. Work your way through

You could end up with less student loan debt if you work at least part-time through school. Some paid internships deliver a double bonus—college credit plus income. Or take on a side gig. 

The usual suspects like fast food, retail, and barista jobs offer flexible opportunities for working students, but don’t overlook the roads less traveled. Indeed.com lists many jobs that provide the flexibility students require and deliver decent pay. These jobs include:

• Virtual assistant

• Fitness instructor

• Bookkeeper

• Brand ambassador

• App tester

And don’t forget about opportunities at school. Tutors, research assistants, library assistants and administrative assistants often find convenient, campus-based employment.

Some employers not only pay you, they also pay for school. Starbucks, for example, is well-known for offering eligible employees a way to get a free first-time bachelor’s degree. Generally, you have to average about 20 hours per week to be benefits-eligible there.

5. Research scholarships, grants, and gifts

Every student who applies for college should also complete the Free Application for Financial Student Aid, aka the FAFSA. FAFSA is a one-stop shop for many free grants and scholarships, low-interest loans from the government, and work-study programs where you can earn while you learn. 

Research additional opportunities that might apply to you. Scholarships.com, for instance, lists some very quirky grants. You might win one for your duck-calling talents, for instance, or for promoting vegetarianism or volunteering with animal rescue groups. And check with your spouse’s or parents’ employers. Some offer tuition benefits to employees’ children and spouses. 

6. Find forgivable student loans

If you choose degrees in education or medicine, and work in underserved communities after graduation, you may be able to get at least some of your federal student loans forgiven. Some states offer their own similar programs. 

Some borrowers who majored in other disciplines can access student loan forgiveness by working for non-profits or in government jobs. 

7. Choose the right college and program

Not every school or every program delivers the same bang for the buck. Consider your potential earnings with your preferred degree program before committing to it. The Hamilton Project analyzed popular college degree programs and the earnings of graduates in those programs. Choosing a higher-earning program could help you clear your student loan balances faster. 

Once you know your program, select a school. Generally, in-state schools offer the lowest tuition, but some university systems keep out-of-state tuition affordable, too. Some states offer students in neighboring states a special rate that’s lower than their full out-of-state charge. 

8. Graduate on time

It can be tempting to take a lighter load, especially if you’re working. However, staying in school longer may run up your costs unnecessarily. More time in school means more time that interest accrues on the balance you already have, which means your loan balance could grow. Plus, you’ll need to keep covering living expenses while you’re still not earning a full-time income. 

If you want or need more time and a lighter load, work more hours and direct extra money toward keeping your loan balances low. 

You can get a more affordable higher education and avoid excess student debt with some planning and discipline. You’ll appreciate the extra effort when you graduate with less debt.