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If you're reading this, you probably either have student loan debt or are on the verge of incurring student loan debt and are looking for ways to minimize your student loans.
With student loan debt levels rising, it's best to pay off student loan debt as quickly as possible or, better yet, prevent the debt from accumulating by taking preventative measures.
Many graduates have to put their lives on hold due to common student loan mistakes. Avoid these mistakes and get rid of your student loans in 3 easy steps!
According to USA Today, up to 68% of college graduates enter the workforce with student loan debt. Our study found that the average student loan debt at graduation is about $30,000.
To minimize the impact, follow these three simple steps to avoid accumulating unnecessary debt.
Step one: Choose the right college and accelerate your graduation
Choosing the right university
Find out how much tuition will cost and also estimate any other costs such as: B. Textbooks, materials, living expenses, and additional costs if you live on campus. This is called the net price. Check out our guide to how much studying really costs.
Take a close look at the cost, lifestyle and career opportunities of your top college choices. Weigh the pros and cons of each college before making your choice.
If you want to narrow down your college choices, take a look at your top choices and rank them by tuition. Also research whether the courses fill up quickly and what alternatives there are.
Related: Where to Apply for College: Find Academic and Financial Fit
The last thing you want is to extend your studies and struggle with half semesters because your required courses are not available and there are no alternatives.
Regardless of whether you were accepted to your dream college or not, you can also start at a community college and then transfer to your dream college.
A few years at a community college will help you improve your grades and increase your chances of getting a good scholarship or scholarship. As a bonus, this option saves you two years of expensive tuition fees.
If you are still not sure whether you can realistically pay off your student loans after completing your studies, the rule of thumb is that the loan balance should not exceed your expected starting salary.
Research scholarships, grants and fill out your FAFSA
Before you overwhelm yourself with tuition fees, find out about all the grants and scholarships offered by your top colleges. Find out how much you need with and without grants and scholarships.
Next, explore your financial aid options. Before you decide on a student loan, make sure you understand all of your grant and scholarship options. Complete your Free Application for Federal Student Aid (FAFSA) and start searching for scholarships and grants immediately.
Finally, consider how much you would need to fill the gap and whether a job would impact it. A college cafeteria job might save you a few thousand dollars, but it could also negatively impact your grades.
If you prefer not to work while you study, plan your career so that you have a comfortable job that supports you after you graduate. Private loans should be your last resort to close the tuition gap.
A word of caution about student loans: Know what you're getting into before taking out a student loan. You've read horror stories about people who can't afford their everyday expenses because their student loans are piling up.
Know what you're getting into when you borrow money for school. Use federal student loans first and then consider private loans as a last resort. Keep in mind that private loans typically do not offer the same benefits as federal student loans, such as: B. Deferral, forbearance or forgiveness.
Create an efficient plan for closing
Determine your degree requirements and determine whether tuition will be charged by semester/quarter or by unit. With tuition calculated by semester/quarter, you can graduate quickly with proper planning and discipline.
Take summer courses and transferable units at a local community college to reduce costs and offset course availability issues. For example, some colleges allow their students to take language courses that tend to fill up easily at community colleges. This will help you make the most of your time while saving money, especially if your school charges tuition per unit.
Step Two: Budget and save to minimize student loan debt
Create a realistic budget for your life now
You want to enjoy the college experience but don't want to go broke in the process. When going out, look for places where you can get good deals on food and drinks to cut down on expenses when eating out.
Reduce your living expenses while you're in school by either living at home or renting an off-campus apartment instead of living on campus. Decide ahead of time how you plan your meals and live. Put money aside while you're in school, whether from a job or financial aid.
First, create a realistic college budget. List all of your income, including financial support, income from work, or contributions from your parents.
Next, list your expenses, starting with necessities like tuition and fees, books, rent or room and board, groceries, utilities, personal items, transportation, and health insurance. Factor any minimum credit card and debt payments into your budget.
Use most of the remaining money to pay off your student loans. If you have a negative number, you need to adjust your budget so that your income covers all your expenses. Your budget should allow for emergencies, car maintenance (if you have a car), and major expenses like a new laptop or a vacation.
If you're already out of school, figure out how much you need to pay off and then create a budget. Calculate your income and expenses and see how much you have left. Factor the minimum payment into your budget. Use most of the extra money to pay off your loan.
Save for the future
Whether your income comes from student loans, help from your parents, or your salary, you need to develop good financial habits from the start. Start by putting aside at least 10% per month.
Saving every month will help you develop good financial habits that will benefit you in adult life and beyond.
To get started, check out our list of the best budgeting apps.
Step three: Increase your income and pay off the balance aggressively
Pay your tuition fees in installments while you are at school
If you are able to pay the tuition fees, pay them in installments to avoid losing money all at once. Even the setup fee or processing fee will likely be well below the student loan interest rate.
However, make sure you understand how tuition payment plans work!
Work to minimize debt
If you can land a paid internship, you can get credit for the work while also having some money to pay off student loan interest.
If you are still in school, a part-time job can be used to replace or reduce loans. Certain jobs can even cover your living expenses in addition to your salary. For example, a job as a medical assistant can help cover living expenses such as room and board. However, if you're not careful, working during school hours can take up the time you need to study and have a balanced university life.
If you're not in school, look for opportunities that further your goals.
Jobs that pay off your student loans
Look for jobs that offer student loan forgiveness or benefits that fit your profession. Certain careers will even pay off your student loans if you stay there long enough. If you're willing to invest for a few years, this is a good choice.
Repay loans early
If you get a big tax refund, bonus, or raise, don't spend it! Use the money to pay off your student loans early or pay them off when you're already out of school.
If your student loan balance is lower, don't fall into the trap of procrastination. If you pay off your student loans in advance, you are more likely to pay off your student loans faster.
Pay the interest
Although you won't have to pay interest on your student loans while you're in school, as a student with an unsubsidized Stafford loan, you won't have to pay interest on your student loans while you're in school. However, there is potential savings if you pay interest.
If you don't pay off your student loans quickly enough, you may need to consolidate your eligible student loans and sort out the rest. Don’t put yourself in that position – take preventative measures now.
Final thoughts
Start with the end in mind. Decide on a college, estimate the costs, and find a way to graduate as quickly as possible, especially if your tuition is calculated by semester or quarter rather than by unit.
Explore all the options for grants and scholarships, then figure out how much you need to close the gap. Find out about financial aid and calculate how much you could earn if you get a job.
Have you used any of these tips to prevent your student loan debt from piling up while you're in college? If you're a college graduate, have you used any of these strategies to pay off your student loans? Tell us in the comments below!
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
