5 Easy Ways to Minimize Student Loans

Written By Young Finances  |  Young Finances  |  2 Comments

It’s likely that you will have to take on some type of debt to complete a college degree. According to the U.S. Department of Education,

“The average total cost of attendance in 2011-12 for first-time, full-time students living on campus and paying in-state tuition was $21,000 at public 4-year institutions…”

That means that a 4 year degree at a state college would end up costing you over 80,000 dollars!

With those costs in mind, its no wonder that you may be considering taking on student debt to cover your college costs. However, there is no need to use student loans for the full cost. Here are 5 ways you can minimize student loans.

1) Only Borrow What You Need

If you know your major and you decide to take out a loan, only borrow what you can expect to make in your first year. According to the National Association of Colleges and Employers, the starting salary in 2012 for a communications major is around 43,000 dollars. Your total student loans for all four years of college should be less than or equal to this. If you make a commitment to save half of your income each year, you can pay off your student loans in less than three years!

2) Use Parental Support

While you’re in high school and have the benefit of free food and housing, you can work and save money for college. Learn to live within your means now so you can minimize the amount of student loans you will need.

Living at home while in college is a great way to save money. This option will not apply to everyone but if you live close enough to your college then you can live at home and save money.

3) Community College first, then University

Living at home is much easier if you are going to a community college. You can earn the college credits that you need in the first two years at a much cheaper rate than a full 4 year university. Once you have your two years completed, then you can complete your full degree at a University and enjoy the benefit of a degree from a big name school without the added cost. You just saved over forty thousand dollars! Good job!

4) Work During College

You can work full time while you are in school. While you won’t get to participate in the ‘College Lifestyle’, you can start paying off any student loan debt that you had to borrow. Paying off the debt while in college will help you avoid unnecessary fees and interest that has been accruing while you are in school.

5 Easy Ways to Minimize Student Loans | Young Finances

5) Apply for Scholarships and Grants

All financial aid is not created equal.
The most valuable financial aid comes in the form of grants, scholarships and work-study programs. These are considered the most valuable aid because essentially you are getting “free” money that does not have to be repaid.

Grants typically come in the form of federal financial aid such as: Pell Grant, Federal Supplemental Educational Opportunity Grant, and Academic Competitiveness Grant.

Individual states also have grant programs such as a Lottery Tuition Assistance.

Scholarships can come in many forms. There are many state supported scholarships and then there are literally millions of private local organizations from all over the country, that provide funding for scholarships.

Also, consider applying for scholarships at the school you plan to attend. Many private schools have large endowments that are awarded through scholarships to deserving students. And public colleges often have alumni that provide scholarships.

There are also athletic, academic, and ROTC scholarships available at most colleges. The top tier of financial aid also includes the federal work-study program, although it is important to note that a work-study position is a part time job. You are paid a weekly or monthly salary based on the hours you worked, and your per-hour rate.

What if I Don’t Have a Major?


If you are not sure what you want to do when you graduate, chances are you will be in school a long time, changing majors and racking up a big bill. If you are not sure what you want to do, start working full-time.

You’ll at least find out what you don’t want to do, and it will put you closer to deciding what you do want to do.

How do you plan to minimize your need for student loans?

This post was originally published as a part of the PNC Achievement Sessions helping you get smarter about money. Click here for more articles.