Checklist for Reducing Student Loans
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By Mark Kantrowitz

August 13, 2020

There are several steps that borrows can take to limit the need to borrow. 

Calculate the Net Price and Choose an Affordable College

When evaluating a financial aid award letter, distinguish student loans and student employment from gift aid. Subtract just the gift aid from total college costs to determine the net price. Compare colleges based on the net price to determine which college is more affordable. This will help you reduce your student loan debt at graduation.

See also: How to Evaluate College Financial Aid Award Letters

Community college is another path many students take in hopes to lower the total cost of college. Community college can cost about $18,000, including tuition, fees, room and board, books and supplies, transportation and other college costs, compared to an in-state 4-year public college which costs about $27,000, an out-of-state 4-year public college which costs about $43,000 and a 4-year private college which costs about $54,000.

However, taking a detour through a community college on your way to a Bachelor’s degree may cause you to miss your destination. Students who start off at a community college, intending to obtain a Bachelor’s degree, are half as likely to graduate within six years as compared with students who start off at a 4-year college.

Save in Advance

It’s never too late (or too early) to start saving for college. Upromise and CollegeBacker are programs that can help you save.

Apply for Scholarships

You can find scholarships at your high school guidance and college financial aid offices, offered through local businesses and professional organizations, and through reputable online searches. You can find scholarships on Bold.org for free. Bold.org matches students to scholarships, which can be created by anyone. Sign up now.

File the Free Application for Federal Student Aid (FAFSA)

The FAFSA is a big part of reducing student loan debt. The FAFSA determines if you are eligible for grants (free money) and work-study. It also allows you to borrow federal student loans. While loans are loans, federal loans have many benefits over private student loans if you do need to borrow. 

Also claim education tax benefits on your federal income tax return.

See also: Complete Guide to Financial Aid and the FAFSA

Work throughout College

Working part-time during the academic year and full-time during the summer can drastically reduce your need to borrow. There are other benefits to working besides the money. Some employers offer tuition assistance to help you pay for college. If possible, find a job related to your future career or one that can help you build a resume or connections. You may be able to find a job that offers additional perks, such as free meals or discounts to employees. 

See also: These Companies Will Help You Pay for College

Understand your Student Loans 

Know what you will owe and your monthly payments under the standard repayment plan. Increasing awareness of debt is the first step in exercising restraint in borrowing. 

Learn the basics, including:

Use our Student Loan Calculator to calculate the monthly loan payments on federal and private student loans.

Borrow Smart 

  • If you must borrow, borrow federal first, as federal student loans are less expensive than private student loans. Federal loans also offer benefits that private loans do not, such as income-driven repayments, generous deferment options, subsidized loans, and potential for loan forgiveness
  • If you exhaust the federal student loan limits, it may be a sign that you’re borrowing too much money. If you must borrow private student loans, shop around for the lender that offers you the lowest cost loans. 
  • Apply for a private student loan with a creditworthy cosigner to increase the odds of approval and to reduce the interest rate.
  • Cut college costs by borrowing only what you need, not as much as you can. Every dollar you borrow will cost about two dollars by the time you repay the debt. Budget before you borrow. Distinguish between needs and wants. Live like a student while you are in school, so you don’t have to live like a student after you graduate. Take advantage of free resources at college and college discounts. 

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Make a Game Plan for Repaying Your Student Loans

  • Choose the repayment plan with the highest monthly payment you can afford. Paying more than the minimum will reduce the total interest paid over the life of the loan. 
  • Take advantage of autopay discounts and the student loan interest deduction
  • Ask friends and family to help you repay your student loans instead of the usual holiday and birthday presents. 
  • Look for employers who help their employees repay their student loans
  • Consider loan forgiveness programs if you qualify.
  • Check out apps that could help you pay off your student loans quicker. 



At Savingforcollege.com, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

A good place to start:

See the best 529 plans, personalized for you

Deal with student loan debt better.

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