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10 Strategies to Reduce And Repay Your College Debt

10 Strategies to Reduce And Repay Your College Debt

When I finished college, I was lucky to find a great job in my field in less than a year. That was the good news. The bad news was that I had a lot of college debt. I had attended a wonderful, but pricey university. Because I was in an academically challenging program, there were several semesters where I opted to live on loans rather than working. That’s something I now look back on with regret.

I can now happily say that I am debt-free (at least as far as college loans go). It took a while to make it happen, and I learned a few tough lessons along the way. If I had to go back and do things over again, there are definitely some decisions I would reconsider.

Knowing what I know now, here are 10 strategies I would like to pass on to current and prospective college students to help you avoid my mistakes:

1. Apply For Scholarships

I was fortunate enough to receive a small scholarship through a foundation that my father’s employer started. It definitely helped. I wish that I had sought out more scholarship opportunities. Unfortunately, at the time I assumed that these were limited to academic superstars and athletes.

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What I know now is that there are thousands upon thousands of dollars in untapped scholarship funds. These funds are rewarded by a variety of groups and organizations. They are given to students who a pursuing specific career paths, who are able to write convincing essays, who have a history of community service – even students who are exceptionally tall. Do your research and you will likely find at least a handful of scholarships you qualify for to apply to.

Here are some sources to consider:

  • Your local Chamber of Commerce
  • Fraternal organizations and charities
  • Your employer and your parents’ employers
  • Associations and trade unions in your field of choice
  • College and high school alumni associations

2. Seriously Consider Work-Study

This is where I made a big mistake. I didn’t want to work a part-time job off-campus because the standard 20 to 25 hours per week was just too much for my demanding schedule. However, if I had taken a work-study job for twelve to sixteen hours each week, I could have cut the amount of student loan funds that I allocated to personal, living expenses by about half. Considering the high amount of interest that student loan debt accrues, that can be pretty significant.

3. Trade Service for Tuition or Loan Forgiveness

In addition to offering scholarships, some companies will reward students, especially employees, with college funds if they participate in a minimal number of customer service hours. Students who are willing to really commit a significant chunk of time to serving others can participate in government programs that offer tuition payments or loan forgiveness in return for service. However, it is important to note that many of these programs require 10 to 12 months or more of service. Examples of service opportunities include: AmeriCorps, Fema Corps, Peace Corps, and Teach For America.

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4. Look Into More Interest-Friendly Options

Private student loans can be expensive. This is especially true because most college students have not established the credit-worthiness or accumulated assets that they can leverage to negotiate loans at better terms. One thing to consider is asking your parents or another supportive family member to help you to finance your education by co-signing or taking out loans in their names. For example, a personal loan that your parents secure with a certificate of deposit at their hometown bank may be half the interest of an unsecured student loan from a large bank.

5. Avoid For-Profit Schools

The two best ways to deal with student debt is to simply pay less tuition and attend a school with a great post-graduate employment rate. One of the best ways to make this happen is to steer clear of for-profit schools in favor of public and private colleges and universities. You will pay significantly lower tuition rates and increase your chances of obtaining a good job post-grad. If you choose to, you will also increase the likelihood that you will be accepted into a decent graduate program.

6. Cut Back on Spending and Delay Major Purchases

Once you have finished school, it is time to sit down and create a five-year financial plan. If you have a lot of debt coming out of school, this plan should focus on reducing spending and being conservative when it comes to taking on new debt.

It is also important to prioritize ensuring that your student loan payments are made without fail. This way, if there is ever a significant financial emergency in the future, you are in a better position to renegotiate terms. For some graduates, this may mean finding alternative ways to deal with emergency expenses. According to First Choice Title Pawn, there are easy ways to get quick cash in the case of emergencies, while still keeping up with your other financial obligations.

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7. Consider Community Colleges and Public Universities

If you are unsure about your major or the career you want to pursue, are you sure you want to go into thousands of dollars in debt to attend a private university? Many students opt to do this and end up owing banks and the federal government lots of money.

If you do have your heart set on attending a private college or your future goals require that you attend a four-year college, take a look at commuter schools and community colleges anyway. You may be able to earn credits during summer sessions by taking a couple of classes at the local community college that you can apply towards your degree.

8. Start Paying Down The Debt Immediately

Many students don’t realize this, but you don’t have to wait until graduation to begin making payments. Even small payments made while you are still in school can help you to reduce your overall debt. This is good information to pass onto your parents as well, if they have committed to helping you pay down your debt.

9. Pay More Than The Minimum Payment Each Month

If it helps, think of your student loan payments like you would a mortgage payment. If you only pay the minimum, the terms of your loan could stretch for decades. However, if you double your payments, or make a second payment each month, you can significantly reduce the length of your loan. Just keep in mind that all loans vary, and ask your lender for information on their specific policies.

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10. Consider Career Paths That Earn Loan Forgiveness

If you are interested in a career that serves others, you may be qualified for full or partial student loan forgiveness. Students entering fields such as nursing, social work, and public education can often have their debt reduced or even eliminated altogether. Just be aware that there are restrictions. For example, a teacher willing to work for five years in the public school system is more likely to qualify than a teacher who goes to work for an elite private school.

Student loan debt is a real problem. It significantly impacts the quality of life of many college graduates, and has also become a matter of political concern. By using the tips outlined above, you may be able to reduce or even avoid taking on too much crushing debt.

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Last Updated on June 26, 2020

25 Easy Tips on How to Save Money Fast

25 Easy Tips on How to Save Money Fast

“How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

You don’t really need to order in food. You don’t really need to buy expensive perfume.

Building from that, you can work out how your regular expenses can be reduced.

As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

And remember: a budgeted lifestyle does not mean a bad or boring one!

But first, understand what budget you can cut down on daily:

  • Regular expenses for the average adult (can be trimmed but not eliminated):
    • food
    • rent/mortgage
    • cell phone
    • insurance
    • socializing/entertainment
    • transportation
    • hygiene products
    • household bills
  • Irregular expenses for the average adult (can be eliminated or cut down a lot):
    • travel
    • clothing
    • medication (*depends)
    • grooming (hair, nails etc.)
    • gifts

Now, let’s dive right into the 25 ways to save money fast:

Save Money on Food

1. Bring a stock of food to the office/work

Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

2. Buy the store-brand version

Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

3. Eat cheaper cuts of meat

Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

4. Have group dinners

If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

Save Money in Transport

5. Get a bicycle

Save on gas money and bus/metro fares with this underrated mode of transport.

6. Use public transport and/or don’t get taxis

Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

7. Find the cheapest gas

Regularly check out where the cheapest gas can be bought.

Save Money in General Shopping

8. Shop online

Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

9. Sell your old stuff

Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

10. Bulk buying stores

For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

11. Become a flea market/car boot sale/street market guru

You can find original gifts and develop good negotiation skills at these places.

12. Generic brand medication

More often than not, the generic version of paracetamol and other basics work the same as the branded version.

13. Choose deodorant, not perfume

It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

Cut Down on Household Expenses

14. Printing

Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

Expand the margins of what you are printing as often as you can to save on paper.

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15. Minimize SMS and phone calls

A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

16. Shop around for insurance

Most people don’t spend enough time searching for the best insurance deal.

Keep a watchful eye out for deals and new competitors in the market.

17. Try re-negotiating your rent/mortgage

If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

18. Don’t get a TV

Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

19. Pool your internet bill with a neighbour

My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

Save Money in Socializing, Entertainment And Travel

20. Have house parties

Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

21. Open festivals, meetups and events

It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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22. Volunteer

If you can’t pay for a ticket, volunteer and get to be there anyway.

23. Housesit

There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

Save Money on Hygiene and Beauty

24. DIY beauty

French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

25. Fewer haircuts/volunteer at a trainee hairdresser

If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

Bonus: Effective Money-Saving Tips for Everything

Here’s a summary of what you can generally do to save more money:

  • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
  • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
  • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
  • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
  • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
  • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
  • Stop and think. Do I really need it?

Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

More Tips for Personal Finance Management

Featured photo credit: Unsplash via unsplash.com

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