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  Home & Family Finance Resource Center

Four Strategies to Help Reduce Student Loan Debt

Spencer Carver / June 28th, 2019

In 2015, the average student loan debt was just over $30,000. In 2019, that has ballooned to over $37,000.  Over 44 million students— active, graduates, and drop outs— have student loan debt. This is a problem that doesn’t appear to be going away any time soon.

Here are some strategies that can help you reduce or avoid student loan debt:

1. Take a semester or two off…and work full time

Most people want to get through school as quickly as possible. However, some students will choose to delay their education and save money for 6 months to a year before continuing. This does require a certain amount of discipline, as the money earned would be saved for school expenses and not on travel or other extra-curricular activities. Taking time off can also allow you to reflect and ask yourself questions like, “will my chosen major lead to a good career and positive return on my investment?” and “what types of jobs in this field are available post-graduation?” Taking time to evaluate these and other difficult questions will help you avoid or reduce debt.

2. Select a less expensive college

Long before you enter college, explore the differences between community college vs. universities, including resident and non-resident expenses. Often times, attending a local community college is less expensive and allows you to complete your general education requirements at a fraction of the cost. Before you enroll in classes, make sure they will qualify for transfer credit to a local university. Local colleges offer several benefits that out-of-state universities do not: they are less expensive and you can complete your associate degree in under two years. This gives you greater flexibility in determining the direction you want to go while keeping costs low.

3. It’s all in the “Hustle”

You can pursue many avenues to seek out financial aid. One is the Federal Student Aid (FAFSA) form which allows you to apply for grant money. This is money that does not have to be re-paid provided you meet certain conditions. In addition, many local credit unions and companies in your community offer scholarships. Make it your full-time job to “hustle” and apply for every scholarship available. 

4. Income Share Agreement (ISA) 

This is a newer concept and it may NOT be for everyone. You will definitely want to do your research to see if this is right for you. The basic concept is that students agree to make payments after graduation based on a percentage of their income over a set period of time. Payments are similar to private student loan monthly payments. The term rates are better for students in higher paying STEM fields (science, technology, engineering, mathematics) than those pursuing majors like history or English.


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