The thought of repaying their loan is one of the biggest stressors for most students. Fortunately, there are a few things you can do to reduce student loan debt.
Calculate the total cost of studying in any college
Many students factor in only the tuition fees when calculating their college costs. This can be a huge mistake as there are several other expenses that you will have to bear. The cost of accommodation, books, transportation, and meals can increase the total cost considerably.
Borrow only what you need to reduce your student loan debt
Even if you can borrow the entire amount, you shouldn’t. Loan companies would be more than happy to loan you in excess of what you need but no matter how tempting it sounds, it is advisable to decline all excess loans. The more you borrow, the longer you will be paying off that debt.
Explore other funding sources
Before signing any loan agreement, you must exhaust all other funding sources for paying for college. Can you borrow from family or friends? Find out how much you can and deduct that amount from the total amount of loan you require. Also, explore all scholarships and grants that you may be eligible for. Check out college savings plans too.
Consider taking up a part-time job
Taking up a part-time job in college is the best way to reduce the loan amount you require. For every dollar you earn, you will have that much less to borrow. In addition to the financial gains, working will equip you with valuable transferable skills that boost your employability after you graduate. The sooner you start earning after graduation, the faster you will be able to repay your student loan.
Understand the repayment terms
Different types of loans have different repayment terms. When you understand the terms of your loan you can plan out a repayment term that allows you to pay back as quickly as you can, taking into consideration other sources of funds. If you are working while in college, keeping aside some money to repay the student loan every month can help you lower your overall debt considerably.
Living a luxurious lifestyle on borrowed money is never a good idea. You want to make the most of your college life but all that partying, socializing, and eating out can cost you. So will choosing to live in an off-campus apartment rather than on-campus. Student loans have to be paid back sometime. There’s no escaping it. Instead of living it up, be frugal and decide what’s worth it wherever possible and use the money you’ve saved to repay your loan earlier. After you graduate, you’ll be glad you did. The lesser the loan you have to repay, the freer you will be to apply to a job of your choice instead of feeling coerced into taking up any job that comes along, just to repay your student loan.
Seek expert advice
There are several ways to reduce student debt, some that you may not know about. Speaking with an expert in your school’s financial aid office will help you learn about the other options available to you. Most importantly, you will learn what financial mistakes to avoid so you do not slide further into debt.
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