As you may have heard, the Consumer Financial Protection Bureau recently announced that student loan debt has now surpassed the trillion dollar mark. Just last year, students borrowed over $117 billion in federal student loans and we are on track to match or pass that mark again this year; the numbers are sobering.  With the economy still struggling and graduates continuing to have difficulty in finding employment, it’s simply not feasible for students to continue this trend without serious financial ramifications for everyone. But, is it possible to graduate debt-free and reverse this trend?

Obviously, not everyone will qualify for need-based federal or institutional aid. However, there are some things every student can do to minimize the amount of student loan debt incurred while in school.

1. Reduce Your EFC

What This Does:

Many students think that working the year before college is a great way to save for school, but if your paycheck won’t cover the majority of your tuition and fees, you may want to rethink this theory. Any money earned the year before college must be included on the FAFSA and may increase your Estimated Family Contribution (EFC). Also, if mom and dad are thinking about making a big ticket purchase (new car, home, etc), encourage them to do so the year before you attend college, as this will reduce their cash on hand (savings) and help lower your EFC.

How To Do This:

• Hold off on big ticket purchases (new car, home, etc.) until the year before college.
• Watch the amount of work you do the year before college; the total money earned could actually harm your available aid.

2. Consider a College With a Lower Tuition

What This Does:

We all have our ‘dream’ colleges, but if you end up with $40,000 or more in student debt after graduation, that dream can soon become a nightmare. Take a closer look at in-state public colleges or lesser-known schools with lower tuition and fees to help reduce the need for student loans. Another thing to consider is earning your AA or AS at the local community college, as this could help reduce housing fees, transportation and credit hour fees.

How To Do This:

• Educate yourself on the true costs of college.  Check the U.S. Department of Education for their college affordability and Transparency numbers.
• Look for schools not only with an affordable tuition, but also a low net price.

3. Secure a Generous Financial Aid Package

What This Does:

Many colleges, such as Brown University, now offer financial aid packages that meet a student’s need without the use of student loans. Depending upon your income level, you may be offered grants and scholarships to meet all or some of your need. If you are in a higher income bracket, these schools still pledge to keep your student loan debt to under $5,000 per year. You can find more information on schools that offer financial aid pledges at the Project on Student Debt.

How To Do This:

• Visit Project On Student Debt and browse through participating schools.

4. Maximize Your Financial Aid

What This Does:

Be sure to complete the Free Application for Federal Student Aid (FAFSA) and contact your college’s financial aid office, but don’t stop there. Many students neglect to look into the various resources for private financial aid, such as local churches, civic groups and businesses. An easy way to find available private aid is through a free online scholarship search service, such as ScholarshipExperts.com. Students can find programs based on hobbies, school activities, clubs and more. There’s no limit on the number of scholarships you can try to win, so Apply, Apply, Apply!

How To Do This:

• See what scholarships you’re eligible for by visiting ScholarshipExperts.com!

Getting a degree should not turn you into an indentured servant for the next 10-20 years after graduation; instead, you should be excited and eager to start your life without the burden of how to pay down your student loan debt. While we can’t guarantee you’ll be able to graduate completely debt-free, these suggestions can greatly reduce the amount of student loan debt you may incur and will hopefully help you to make smarter choices when determining where to go and how to pay for college.

Tags: scholarships, student debt, student loans
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