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10 Ways to Reduce College Debt

10 Ways to Reduce College Debt

More than two-thirds of college graduates have student loan debt, and the average amount is a staggering $30,100. When you add interest to this, it can take people decades to pay off their debt. Fortunately, whether you are in your freshman year or have already graduated, there are some things that you can do to reduce your total student loan debt. In fact, with a little ingenuity, you may even be able to avoid taking out loans at all. Utilizing the following tips may not cover all of your expenses, but it will definitely give you a good head start.

1. Volunteer to Work off Student Loans

Are you a college graduate and having a difficult time paying your loans? You can get some financial relief while doing something good for the world. There are programs that enable you to set a funding goal, which you then pay off by donating an appropriate amount of time to a charity. This volunteer opportunity is currently only open to college graduates, but it couldn’t hurt to start making plans to utilize it before you finish earning your degree.

2. Seek Out Unusual Scholarships

Scholarships are always a great way to reduce your expenses, but the most well-known options are also highly competitive and may seem out of reach. Fortunately, there are numerous smaller scholarships available that you may be eligible for. A prime example is the $3,000 Tobi Cares Scholarship for women. There are also a wide variety of small scholarships you can apply for based on your race, abilities or even your medical history. Ultimately, the sky is the limit when it comes to the funding that’s available, but you will need to be willing to put in a lot of work tracking these options down and applying for them.

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3. Consider Off-Campus Housing

There are many misconceptions about the cost of off-campus living, but the reality is that it is typically a better option. However, you will need to have roommates, and you will also need to do a solid comparison of expenses to make sure you get the best possible deal. Some very expensive major cities are actually more cost-prohibitive than living on campus, so make sure you take that into account. In the long run, your best bet is to choose housing close by to avoid parking fees and other additional expenses. If this is available cheaper off-campus, then go for it. If not, living on campus makes the most sense.

4. Go to School Part-Time

It’s understandable to want to graduate as quickly as possible. There are several advantages to taking your time, though. A major perk of going to school part-time is that you can also work to help pay for your tuition. Even if you are still going to need to take out loans, you’ll also have more time until you are required to start paying them back. Remember: student loans do not become collectible until after you graduate. Choosing a longer path to graduation may be exactly what you need to avoid a mountain of post-school debt.

5. Buy and Sell Used Textbooks

Do you have an extra $1,200 to shell out per year for textbooks? This is what most students pay annually, and the price continues to rise. After a four year undergraduate degree, you could spend almost $5,000 on your textbooks alone. The good news is that you can drastically cut this fee by buying your textbooks used and selling them after you’re finished with each applicable class. If you prefer, you could even rent a textbook instead or look for a less expensive Kindle version. No matter which route you choose, you should be able to save at least 50 percent on your textbooks.

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6. Avoid Restaurants

Eating out may be a common experience for college students, but you don’t have to fall into this lifestyle. Not only is it much more expensive than buying your own groceries but it can also lead to the so-called freshman 15. If you are living on campus, be sure to eat as many meals as possible from the cafeteria. After all, you’ve already paid for this food with your lodging expenses, so why let that go to waste by effectively paying twice for a meal? Those who live off-campus can save a lot of money by cooking their own meals. In fact, it’s estimated that eating out three nights a week costs $3,900 per year more than making food at home.

7. Steer Clear of Credit Cards

It is way too easy to utilize the convenience of a credit card instead of actually being accountable for every single purchase you make. Sadly, this ease of use often leads to additional debt. Instead of making it even harder for you to pay your bills, operate on a cash only basis. This will make you much more aware of what you’re spending, and it will also make it impossible to overspend on frivolous items.

8. Cut the Cable Cord

Entertainment can be an essential part of unwinding, and it is necessary for college students to destress whenever possible. However, paying for cable or regularly going out to the movies is not a good idea. The average American spends $123 a month for cable, but you can drastically reduce this expense by opting out of cable in favor of Netflix or Hulu. There are also services such as Slingshot TV that enable you to select the cable channels that are most important to you. It’s also possible to remain entertained for free by taking advantage of your local public library. Most libraries have DVDs and video games that they rent for free to members.

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9. Ride a Bike

The expense of an automobile can be very high. After all, you not only have to pay for the car but you also need to take care of insurance, gasoline, oil changes, and other types of maintenance. Not to mention parking fees and a long list of other hidden costs. By not taking a car to college, you can simplify your life and save a lot of money. Riding a bicycle is one of the easiest alternatives, and it has the added bonus of being eco-friendly. If necessary, you can also still save lots of money while using public transportation.

10. Head to Europe for Free College

If you could eliminate tuition altogether, you could definitely stay out of debt, right? Well, pack your bags and head to Europe! There are 44 schools in 8 European countries that allow Americans to get a free college education. You will have to take care of your housing, food, textbooks and testing fees, but you won’t get stuck with tuition costs. This can save you tens of thousands of dollars each year.

There are countless other ways that you can reduce your expenses, including stretching your wardrobe budget by taking advantage of sales and closeout prices. Although you may not enjoy scrimping and saving right now, being responsible while you’re in college and during the first few years after graduation can help you save a ton of money on student loan interest fees.

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Featured photo credit: 0TheFool via pixabay.com

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Holly Chavez

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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