Congratulations to the Class of 2017. This lucky batch of American grads will likely take the title of Most Indebted Class in U.S. History over the previous champ, the Class of 2016. Before them, the title was held by the Class of 2015. Sense a pattern here?
One thing is certain: The $1.3 trillion student loan crisis isn’t going away anytime soon.
So what can you do about it? The good news is you don’t have to wait until the chaotic, post-grad job hunting period to begin addressing your debt. Early steps can get the ball rolling. Here are some tips for taming student debt while you’re still in school.
1. Aim to save.
Being thrifty as a student shouldn’t be anything new. After all, getting creative with money is required learning on campus. Make an effort to prep your own meals when you can. Sure, hectic demands don’t always make this possible, but you’ll be surprised by how much you can save.
The same goes for beverages, especially coffee. Let’s say you grab a cup a day from the local café for $4.00. Five drinks a week times 52 weeks equates to $1,040 a year spent on coffee. Compare this to brewing your own at home, which costs about 16 to 18 cents per cup. You can find a second-hand coffee maker for pennies on the dollar at thrift stores that should last you through late night cramming sessions and midterm madness.
For entertainment needs, check bulletin boards and postings around campus for upcoming concerts, movies, exhibits, and other social events. They’re generally affordable, if not free. Bonus: Social activities are thought to help reduce stress levels. According to the American Psychological Association, having strong social support can improve your ability to cope with problems on your own by improving your self-esteem and sense of autonomy.
You can also save on your study materials. If possible, never buy brand new course materials — consider renting your textbooks or buying them used instead. If you start early, you may be able to find some of your materials free through the school’s library. Employing these simple tactics may help you save a significant amount of money as the semester goes on.
2. Find work on/around campus
Getting a part- or full-time job can help keep your expenses down, providing an extra buffer against debt while also giving you valuable work experience for your resume. Business major? Consider asking around the marketing department if they need help. Fitness fanatic? Apply for jobs at the student rec center. Even a quiet position at the library can be fruitful as a built-in study environment during slow hours.
Check out announcements, flyers, and the college newspaper for local job listings. You can rake in additional income online for freelance work as well. Consider your skill set, then explore sites like Fiverr, UpWork, or TaskRabbit to find work that best fits you. Most projects are one-and-done or short term, granting you the flexibility every busy student needs.
3. Explore scholarships or financial aid.
You might think scholarships are reserved for students with superior grades or stunning athletic ability. Well, scholarships and financial aid opportunities also exist for students who have trouble paying their tuition. There are also free online scholarship search engines that can help you find scholarships that match your skills and situation, even if you’re already in college, such as the search engine available through the College Board.
Seek out an advisor or faculty member to whom you can explain your financial situation. Though the requirements for scholarships and financial aid can vary, whether you are a new or returning student, there may be a scholarship or financial aid program that can help cover some of your tuition. Lastly, don’t forget FAFSA, the Free Application for Federal Student Aid.
4. Consider refinancing.
Student loan refinancing can help lower your monthly payments, your interest rate, and improve your odds of paying off your loan faster. Explore sites like Make Lemonade, helpful resources with tips and tools for managing your student loans. They recently put together a list of “top student loan refinancing picks for 2017.”
It’s easy to get overwhelmed with stress and anxiety when attempting to chip away at a mountain of debt. If you’re out of school and have already refinanced and still feel helpless, consider doing some research on student loan forgiveness programs. There are four primary programs with varied qualifications and eligibilities. You can learn more about them here.
5. Begin investing once you graduate.
Once you graduate, examine your finances for any leftover savings. If you have money that you haven’t yet used for school, consider investing it into a mutual fund. Making an early investment in your future can help prepare you for debt that might spring up later in life.
As a student, paying off your debt quickly can be beneficial to you for the rest of your life. Consider the tips above, take the money you save throughout your college career, and invest it with proper professional guidance to help make school debt one less financial issue you’ll have to worry about.
All investing involves risk. You should consider the objectives, risks, charges, and expenses of an investment carefully before investing. This article is for informational purposes only; nothing herein should be construed as investment advice, or as a recommendation to purchase or sell a particular investment.
Things to Consider:
• Consider building thrifty saving habits and finding low-pressure sources of income while in school.
• Avoid getting lured into using a credit card to cover daily expenses — that’s the fast lane to high-interest debt.
• After graduation, consider refinancing your loan and investing savings.
• Getting over mountainous student debt may require a trajectory shift in life plans. Stay positive and stay proactive.