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Making Sense of Student Debt

Student Debt Blog image
400 200 Rebecca Petrie

For many, college is an exciting time filled with fun new experiences, friends, and memories. It’s when you move away from home, gain a new sense of independence, and develop the skills you need for the workforce. But what is often overlooked is the amount of student loan debt you’re left with by the time graduation comes around.

To avoid this staggering amount of student debt, we’ve put together a list of actions you can take now to minimize it. But first, let’s give you an overview of the current student debt situation in America.

America’s Student Debt Situation

Coined a national student debt crisis, the United States alone has a total of $1.48 trillion in student debt, spread out among 44 million borrowers. This amount surpasses total US credit card debt by $620 billion! And students who borrow money for college graduate with an average of $37,000 of debt! What’s worse? Student debt is now the second highest consumer debt category – behind only mortgage debt.

With the average price of public tuition being $9,970 as of the 2017-2018 academic year, it’s no surprise that 70% of American students take out student loans to help pay for their education. According to the Huffington Post, the population with student loans in the US is greater than the entire population of Canada, Poland, Australia, and 200 other countries worldwide.

It’s been stated that one in four millennials with over $30,000 in debt expect to take more than 20 years to pay it off. And if you’re between the ages of 20 and 30, it’s likely your debt payments will amount to almost $350 a month – excluding interest!

Tips to Minimize Student Debt

So, how do students pay off this overwhelming amount of debt they suddenly face at graduation? The first step is to take control of it while you’re still in school.

It’s important to note that not all debt is bad, especially when it comes to your education. To help you pay off your loans faster, we’ve compiled a list of useful tips and tricks that will help you avoid becoming a statistic. After all, your education is one of the best investments you can make in your lifetime!

1) Prepare Yourself

Weigh Your Options

Before you begin your journey to college, it’s important to do your research. One thing many college-bound students don’t consider is choosing a more affordable college experience. For example, choosing to attend a public university will be cheaper than a private university, and in-state tuition will be cheaper than going to an out-of-state school. Comparing tuition and fees at the colleges you’re interested in is the first step to minimizing your debt.

In addition to determining which colleges are more affordable than others, consider the cost of living in the area you decide to study in. Calculate how much you’ll end up spending in off-campus food, transportation, rent and entertainment. Remember: everything adds up!

Fill Out the FAFSA

Filling out the Free Application for Federal Student Aid (FAFSA) is the most important thing you can do before each new school year. The FAFSA is the largest provider of student financial aid in the nation and will determine if you’re eligible to receive federal grants and loans. The FAFSA will also determine if you’re eligible for work-study programs throughout the school year.

For more information about the FAFSA, click here.

Apply for Scholarships

We already know that going to college comes with a huge price tag. Luckily, there are thousands of scholarships out there to ease the financial burden. Scholarships are essentially free money that you can take advantage of each academic year! Search for scholarships early and often before each school year begins. You can seek scholarships at your school or through community organizations and other groups or affiliations you’re involved with.

Popular websites to search for scholarships include: Scholarships.com, Fastweb, Chegg, and Cappex

Search for Grants

Grants are also available to ease your financial burden. Like scholarships, college grants do not require repayment, but are typically based on financial need. You’ll need to fill out a FAFSA to check your eligibility for federal grant programs.

2) Save Your Money!

Cut Your Expenses

The key to being able to afford tuition while still living comfortably in college is to limit your expenses. While this seems like a difficult feat, it’s easier to do than you may think. Below are some tips to save on your everyday necessities like rent, transportation, entertainment, school supplies, and more.

Rent: Your largest expense after tuition will be your housing costs. When it comes to rent, sometimes it pays to make sacrifices. For example, getting a roommate or two will help you save money by splitting the cost of rent and utilities. You can also opt to live outside of your city center to avoid heftier rental fees. If possible, consider living at home with your parents. Although this may not be your ideal situation at the moment, it will save you thousands of dollars in the long run.

Transportation: The average cost of owning and operating a vehicle in 2017 was $8,469 annually, according to the American Automobile Association. Avoid these costly payments by taking public transportation, cycling, or even walking to the places you need to go.

Cable and phone: Cut out your cable bill by streaming shows online or watching TV in the student lounge of your residence. Consider reducing your cell phone plan or change carriers for a better deal. Popular mobile carriers such as T-Mobile, AT&T, Verizon and Sprint offer student discounts, so we recommend doing your research!

Entertainment: If you’re willing to be creative, there are several ways to have fun without breaking the bank. Attend on-campus sporting events, talks, movies, or even concerts. And if you’re looking to do something outside of school, your student ID can save you tons of money at most large entertainment venues including movie theatres, sports arenas, museums, festivals, and more. Take advantage of student night promotions by local businesses for drink and food specials as well as entertainment.

Spend Smart

On top of tuition, additional school fees such as textbooks, academic software, and campus services are often unavoidable. Luckily, there are ways to save on these costs as well.

Textbooks: When it comes to textbooks, your best bet is to buy used. The market for used textbooks is huge, as many students buy these books only to use them for a single semester. Amazon, Chegg, Textbooks.com, and Campus Book Rentals are popular websites where you can find great deals on used textbooks. And don’t forget to sell your books at the end of the semester to make some extra cash!

You can also opt to read your textbooks digitally if they are offered in an eBook format. eTextbooks are a cost-effective way to access your course materials and are up to 60% cheaper than traditional textbooks.

Academic software: From statistics to graphic design, you may be required to buy expensive software for your courses or you may want to use a program that will help make student life and studying easier. Fortunately for students, OnTheHub offers academic software for up to 90% off! Products from Microsoft, Adobe, IBM, VMware, and many more are offered at awesome discounted prices – exclusively for students and faculty! Students may also be eligible to get popular software like Windows Education and Adobe Creative Cloud at no cost. Search for your school to see the deals available to you.

Campus services: Most campuses across the country offer tons of inexpensive or free services for students. For example, instead of spending your hard-earned cash on an expensive printer, opt to print your coursework and papers at your college’s printing center. Or if you’re interested in working out, look no further than your campus’ gym. Most campuses will give you a free gym membership just for being enrolled in classes! Other on-campus services include tutoring, healthcare, career services, writing centers, and more. Check your college’s website to view all services offered to students for little to no cost.

3) Start today!

You don’t have to wait to begin tackling your loans. There are plenty of things to do now to keep your debt to a minimum. These can include searching for internships or co-op placements, creating a budget, and finding part-time jobs or work-study programs.

Search for Internships or Co-op Placements

If your program offers co-op or internship opportunities, go for it. Not only are co-op placements and internships a great way to make money as a student, they’re also an opportunity to gain meaningful work experience that will be a huge asset for you beyond graduation. Be sure to meet with your school’s co-op advisor, refresh your resume, brush up on your interview skills, and be persistent. In some cases, the money you make from these co-op and internship positions may be enough to cover your total cost of tuition!

Seek a Part-Time or Work-Study Job

If you’ve filled out the FAFSA and qualify for financial aid, you could also take advantage of a work-study program. These part-time jobs will help you earn some extra cash to put towards your student expenses. Generally, work-study positions are on campus or in the community and can be in areas related to your course of study. And because these jobs are through your school, the employers are often more flexible and willing to work around your class and study schedules. Just be sure to apply for the FAFSA as soon as possible, as the majority of work-study positions are first come, first served.

Create a Budget

Become more aware of the money you’re spending by creating a budget. Budgeting is an excellent way to prevent overspending and debt while saving for the future.

First, you’ll need to track your monthly income. In a spreadsheet, record your monthly sources of income, next to your monthly expenses. This will give you a clear sense of where exactly your money is going and how much you’re spending per month. We recommend categorizing your expenses by rent, utilities, food, transportation, credit card payments, tuition payments, etc.

After tracking your necessary expenses, take a look at where your extra income is going. Common categories for non-essential spending include entertainment, shopping, and restaurants/dining. This will help you identify poor habits where you may be spending beyond your means. For example, perhaps you spend money on small expenses that add up over time, such as your daily coffee. Or maybe you frequently shop for things you want but don’t exactly need. Figure out how you can prevent these unnecessary expenses so you can put your extra income towards tuition and other essentials.

To make budgeting easier, there are tons of excellent apps that will do the math for you. We’ve listed some of the most popular ones used by students below:

Mint: Mint is an awesome, all-in-one tool that connects your savings, checking, and credit card accounts and finds trends in your spending. It also helps you create detailed budgets, track investments, discover new ways to save, and more. Overall, this free app provides you with a big-picture view of your financial life.

You Need a Budget (YNAB): You Need a Budget is an app that also syncs all your bank accounts together. This a great tool if you’re looking for something more hands-on. Rather than automatically categorizing your transactions, YNAB allows you to manually import them at the end of each day. This helps you become more disciplined and focused on your spending. You can get YNAB for $5/month or $50/year.

PocketGuard: With all your financial accounts in one place, PocketGuard tracks your spending and lets you know how much money you have “left in your pocket” to stay within your budget. You can also get insight into where your money is going by category, compare your current month’s spending to your average, and track your net worth change over time.

Every Penny Counts

Some loans offer the option of paying your interest while you’re still in school. The small interest amounts you pay while you’re still enrolled will help reduce your student loan balance and build good habits for the future. Each month, try going beyond the minimum amount owed and pay back as much as you can. Setting up automatic monthly payments is also a great option to be sure your money isn’t going to waste on other non-essential items. Just remember to pay off your high-interest loans first!

Be Money Smart

There are tons of options out there for students to make the most of their money. For example, many banks offer unlimited transactions, no monthly fees, and special cashback rewards just for students. Do your research to find the best options that work for you!

In addition, do your best to avoid credit cards. Failing to pay back a credit card balance on time comes with hefty interest fees and a low credit rating that could make it hard to apply for an auto loan or mortgage in the future. Sticking to a checking and savings account will help you become more aware of how much money you’re spending and will keep you on track to minimizing your student loans.

Lastly, look into investment accounts that will help you build a more financially secure future. As long as you have a job where you earn income, you are eligible to open a Roth IRA. Roth IRAs are a tax-efficient way to save for your retirement. The Roth IRA is a perfect choice for college students, as it can reap major savings and the funds will still be available in the event of an emergency.


Drowning in student debt after college doesn’t have to be your reality. By incorporating the strategies mentioned in this post, you’ll be ahead of the game when it comes to paying back your loans.

And while college isn’t cheap, it’s well worth it! In fact, the average college graduate with a bachelor’s degree is expected to earn $1.2 million more over the course of their lifetime than those with a high school diploma!

Making Sense of Student Debt Infographic using statistics from student load debt across the United States.



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