If fall semester hasn’t started for you yet, it will soon. It’s back to school season, and for many students each new school year means another round of student loan debt.
While student loans can provide a good return on your investment in your education -- college-educated individuals still outearn those without degrees -- your future financial stability and security may depend on how well you manage loan debt today. It’s important that you only take out as many student loans as you need to help you earn that degree.
With that in mind, consider these 6 tips to help you avoid more student loans as you gear up for heading back to school.
Use your student loans for educational expenses only
You can run up your student loan debt load incredibly fast if you’re using your loan money for things beyond tuition costs and school fees. Ensure the money you borrow is going directly toward college expenses -- not discretionary spending like trips, nights out, or rent for the swankier apartment down the road.
Take out a part-time job or establish a side hustle
If you do need extra spending money, consider picking up a part-time job. Positions on campus can offer more perks than just cash; you may be able to register early or receive discounts. If you feel like your course schedule is too difficult to work around a job schedule, you still have options. Try working one-time events, doing brand ambassadorships, or some other type of side gig that allows you some flexibility around school. (It’s never too early to start freelancing and trying your own side hustle!)
Look for other forms of financial aid
Your university’s financial aid office might consider loans a form of “help,” but don’t make settling for more debt your first choice. Ask about scholarships, grants, or other programs that may be specific to your chosen degree program. Even if you didn’t qualify for a public or private program in the past, it’s worth re-applying for if your GPA or other factors have changed.
Take a full course load (or more)
If you can minimize the semesters you work toward your degree, you’ll save money on the cost of fees that recur every semester. You’ll also have the opportunity to start your professional career -- with professional salary -- that much sooner. That can ease the burden of the student loans you had to take on in order to earn your degree.
Embrace frugal living
No, you don’t need to start clipping coupons or auditioning for Extreme Cheapskates (unless you just want to do that). But you should seek to be more resourceful, less wasteful, and just generally being happier with less.
Look to minimize your expenses and make the most of what you have. Share living costs with roommates -- or consider living with your parents if possible. Buy (or even rent) used textbooks, walk or bike instead of putting gas in your car, and make the most of the resources your university offers to students. For example, don’t pay for a gym membership if your student fees include free access to the school gym.
It may not be fun to cut back on stuff or spending, but it’s worth doing if it helps you make your college years a little more affordable.
Re-evaluate your university
If you’ve already racked up considerable debt with your student loans and you need to take out more, it might be time to evaluate whether you can truly afford to continue attending your current university. Switching schools is a big move to make, but it may be worth it if it means saving your finances.
Attending a big-name school comes with a big price tag. While some degree programs hold more weight coming from certain schools, this isn’t the case across the board.
Be honest with yourself and do your research. Are their cheaper schools that offer excellent programs for the degree you’re pursuing? If you can’t afford your current university, there are cheaper alternatives, and most if not all of your credits will transfer, it’s worth considering making the switch to a more reasonably-priced school.
If you must take out more student loans, get the right ones
If you have no choice but to take out additional student loans, avoid loans from private lenders. Private student loans often have higher interest rates and many are variable. Federal loans, on the other hand, typically have lower interest rates that are fixed.
With federal loans, accruing interest and repayment periods usually don’t start until graduation. Interest on private loans, however, can start accruing the moment you receive the check for the borrowed money. And you may be required to start paying back the loan sooner, as well.
When you do start repaying federal loans, you’ll have more options if you run into trouble. They’re easier to consolidate and many repayment programs are available.
But remember, taking on additional debt should be considered a last resort. Try these above 6 tips to help you avoid more student loans first!
About the author: Kali Hawlk is the founder of Common Sense Millennial, a resource for members of Gen Y who want to do more with their money. She works as a writer and content manager, and is passionate about personal finance and business. You can connect with her on Twitter @KaliHawlk.