5 Ways to Pay Down Your Student Loan While in School

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If you’re currently in college, you might be a little leery of your student loan situation. Maybe you’ve even vowed to worry about it once you graduate. That idea is no bueno.

Loan servicing companies like FedLoan will be waiting to collect on those loans just six months after you graduate. So, trying to land your dream job and figure out this whole adulting thing while footing a heavy student loan bill can get a bit overwhelming.

Trust me, you don’t want to delay paying off debt until after graduation. I’ve got a better solution for you. Get ahead on your debt while you’re still in school with these five simple tips.

Focus on the Interest

If you are struggling to make extra payments on a tight college budget, at least aim to repay the interest that is accumulating while you’re in school.

Say you took out a $15,000 private student loan at 6.00% APR. You wouldn’t owe a dime of repayment until six months post-graduation. Great, four and a half years of not thinking about student loans, right? Wrong! Your loan is growing by a whopping 6% each year! By the time you see your first student loan bill, your new total is about $19,000.

For this loan scenario, it would only cost you about $75 a month to make interest-only payments. That small payment during your college years could ultimately save you several thousands of dollars since you won’t be paying interest on top of interest.

student loan

Get a Job

Please don’t be part of the majority that says school is your job. Look, I understand it’s hard to balance school, a social life, and any extracurriculars with a job…but I also know it is a better option for you and your budget.

Skipping out on parties and overseas language enrichment trips to work on campus or at a fast food joint is not anyone’s idea of fun. However, it will save you thousands of dollars on your college journey. All the money you earn can be used for living expenses and other school costs, which means you can borrow less. Since you will be devoting more hours to work, you will hopefully have less time to spend foolishly, too.

Bonus: When you graduate, you won’t be hit with the realization that you need to “balance everything” because you will already be accustomed to the hustle.

Find Work at Home Opportunities

As a college student, your schedule might be too spread out to nail down a traditional part-time job. Thankfully, you can still make money in the nooks and crannies of your busy schedule with legitimate work from home jobs like freelance writing or proofreading.

You can even cater your services to other college students. For example, you could offer essay editing services or meal prepping for weight loss. Don’t confine yourself to jobs you can only do at home or in your dorm, either. These days, you can earn money in your spare time by driving Uber or Lyft or even by offering to be the designated driver for a party.

Think Before You Borrow

Just because you can borrow money does not mean you have to accept all of it. Many college students get in the mindset that they need to maximize their school experience with every loan dollar they are given. College can be a fun and amazing time, but by the time you are in your 30s, you’ll still be paying for that cool apartment or must-have laptop you bought with your loan money during college.

Live as frugally as possible during your college years so that you can enjoy life after graduation to the fullest. Borrow the bare minimum to pay for tuition, eat frugally, and maybe even live with your parents.

College is really the only acceptable time you can live like a hobo without much scrutiny, so don’t go into debt trying to glamorize your four-year degree. ????

Take Advantage of Community College

Almost every university accepts transfer credits from community colleges. You can complete your general education requirements at a community college for a lot less money, then transfer into the university of your choice as a junior. This could reduce your college tuition bill, and ultimately your student loan bill, by thousands of dollars.

Using the tuition averages from CollegeBoard, attending community college for the first two years before transferring to an in-state public university will cost you $25,700 compared to paying $37,640 for attending a public university all four years. Even more dramatically, transferring to a private university will cost you $71,700 compared to $129,640 for a four-year stint at the same school.

Are you already enrolled in a university? You can still dual enroll in a community college and knock out those gen eds. This can shorten the length of time it takes to get your degree and reduce the amount of money you pay for your education. Online courses make it super simple to fit community college classes into your university schedule. Trust me, doing this is possible…even if college counselors don’t advertise it. Keep in mind, though, that your financial aid and/or loans may only apply to one school – so you’ll have to pay for those community college credits out of pocket.

Final Thoughts: How Much Student Debt Should You Take Out?

Remember, college is only four to six years of your life. Unfortunately, the effects of the debt you acquire during this time can affect you for the rest of your life.

Get the degree you need, then get on with living! Remember, the more debt you take with you, the less freedom you’ll have to buy that house you want, invest in your future, and ultimately live the life you’ve dreamed of living.

The choice is yours. Good luck!

Greg Johnson is a personal finance and frugal travel expert who leveraged his online business to quit his 9-5 job, spend more time with his family, and travel the world. He is the co-owner of the popular blog Club Thrifty, where he teaches others how to spend less and travel more.