Minimizing Debt

Earn college credit while in high school.

Some high schools allow students to enroll in courses at a community college while completing their senior year. This option allows students to earn college credit while still in high school, meaning it could potentially take them less time to graduate from college. Many colleges also accept certain test scores on AP exams for college credit. Ask your college about their policies. By earning credits before you enroll, it can potentially reduce the amount of time it will take to finish your degree and therefore the amount you may need to borrow.

Enroll at a community college for your first two years.

If you are planning on pursuing a bachelor's degree or higher, you may want to consider enrolling at a community college for your first two years. Many community colleges provide programs that prepare students to transfer to a four-year college after two years. Community colleges are typically much less expensive than public or private four year schools. However, make sure you understand which credits can be transferred to other schools and which schools will accept them before you make your final decision.

Fill out the FAFSA by your school’s deadline.

In order to make sure you receive all of the financial aid you are eligible for, including federal and institutional grants (“free money”), make sure you complete your FAFSA and any other required financial aid forms by the school’s specified deadline. Missing a deadline could mean you miss out of opportunities to receive free money or cheaper loans.

Apply for scholarships.

Scholarships are not only available through your school. There are scholarships out there for just about every type of student. Local scholarships tend to be smaller but are a lot easier to get. A few small scholarships can add up to pay for books and living expenses, thereby reducing your borrowing needs. Before you borrow, may sure you explore your free money options first. Start your search here.

Budget for a lower cost of living.

A good way to reduce the amount you need to borrow is to create a monthly budget. Be realistic and see where you can cut back on living expenses in order to reduce your total borrowing.

Spend responsibly.

Small purchases can really add up. Take a look at the chart below. Try to minimize these types of costs and instead apply the money you save to tuition, fees, books and groceries. By eliminating some of these costs, not only will you save money - you will also live a healthier lifestyle.

Looking to get a big screen TV? How about that new sweater? See how much your big ticket item will cost you in the long run if you put it on your credit card.

Get a part time or summer job.

If you feel like you can, work part time during the school year and summer and use your earnings to pay for college costs, reducing the amount you need to borrow. Keep in mind that working too much can cost you if it means you are unable to finish school on time and need to pay for an extra year of tuition. That’s why it is important to find a good school-work balance. Typically, you shouldn’t commit yourself to more than 10-25 hours a week if you are full time student.

Consider using your savings.

Savings can be used to help pay for tuition, fees, books other expenses. Once you graduate, you will be glad you have less to repay. When you receive a gift, allowance, or earn funds from a summer or part-time job, consider putting it in the bank for school costs.

Be wise with your credit cards.

Practicing responsibility and discipline with credit cards from the start is vital to establishing good credit and avoiding a heavy debt load post-graduation. Always use your credit card wisely. Don't think of your credit card as an additional source of income. Instead, only use your credit card when necessary and pay your entire credit card balance off each month to avoid interest charges. Learn more about being smart with your credit card.

Pay down your debt while you are in school.

If your budget allows, pay the interest on your student loans while in school. Interest that accrues while you are in school is capitalized on some student loans, which means you end up paying interest on interest that accrued during in-school/grace periods.