How to Minimize Student Loans While in College

How to Minimize Student Loans While in College

Most teenagers live in a financial bubble while their parents support them and pay all their expenses. When they go to college they need to quickly learn to be financially independent and take care of their own expenses. One smart thing they can do is to minimize their loans during their college years. Read this article for ways college students can minimize their loans while studying, or importantly build a debt reduction strategy starting in high school.

Create a Budget

Many young people first learn to keep track of their expenses when they go to college. The best way they can organize their finances is to make a monthly budget so they know where and how much to spend. They can also see where to cut costs so they can use that money towards tuition vs going into debt.

Minimize Housing Costs (roommates are good)

The best way to reduce household expenses is to have a roommate. There are five reasons why it's good to have a roommate:

  1. Save rent - in big cities like San Francisco and New York, you can save up to $1,200 in rent if you have a roommate. If you live in Washington, San Diego, or Miami, you can reduce your rent by $800 to $1,000. If you have several people all living together in a large house the savings can be even more.
  2. Share the cost of furnishing the apartment - if you are moving into a brand new apartment, where there is no furniture, you will have to buy all the household items needed to make the apartment livable. Furniture, kitchen supplies, a TV, etc are expensive and it is best to share the price with a roommate.
  3. Divide all the bills - if you have a roommate it is much cheaper when utility costs, internet costs, heating, etc.
  4. Share other expenses - in addition to sharing the rent itself with roommates you can share expenses regarding cleaning, streaming services, household items, etc.
  5. Roommates can be a lot of fun (if you are already friends or get along well). It's much nicer when you have someone to talk to, share meals with and watch shows you love together (although you should be studying instead of watching TV, right?).

Avoid Having a Car

Considering that the car is like another member of the family and that it requires certain costs, due to regular service, gas, insurance, and breakdowns. All this can lead to high costs. That is why it is best not to buy a car while you are in college and to use public transportation when necessary. Ideally pick a place to live that is close to school so you can walk or ride a bike as much as possible.

Buy Used Textbooks and Sell Them Back

New textbooks are crazy expensive. To reduce costs, it is best to buy used textbooks. If you are lucky the teacher will allow past editions of the book and provide the chapters / page numbers for the previous edition. Another trick is to sell your books soon after finals week to get a decent percentage back. Chances are you probably won't ever want to look at the book again anyway ;)

Stay Focused on Graduating On-Time

The best way to minimize loans while in college is to focus on graduating on time. If you happen to become a “5th-year senior” and graduate with more credits than you need, your student loan will be higher. So, stay focused on graduating on time.

Double-dipping requirements (like a language arts + culture requirement, or a math + science requirement) is a good strategy. Talk to a counselor at your school about how you can stay on track or even get ahead. This requires some planning because certain key classes you need for your major may only be available once a year.

Transfer from a CommunityCollege to a 4-year College to Save on Credits

Studying at universities can be very expensive. Community colleges are generally much more affordable than the bigger four year schools (universities). Going to community college can take the place of the first two years of a four year university.

With this strategy you do your freshman and sophomore year at community college, transfer your credits, then do your junior and senior year at the big school. In the end you earn the same degree as students who complete all four years at the university. Except you save a good deal of money.

Talk to a counselor about your plan. Depending on your major, some classes may transfer for full credit, and others for only partial credit. Sometimes prerequisites can be fulfilled and other times not. In general though, transferring credits is a very common thing to do and shouldn’t be difficult at all.

Take AP Classes in High School to Transfer Credit

One strategy for getting ahead is to take AP classes in high school. If you pass the associated AP test, you can get requirements waived and credits applied to your college record. High achievers in high school can start college with most of their freshman year already completed. That reduces their college out of pocket by almost 25%! Here is a list of common of AP subjects:

  • Arts (art history, music theory, design)
  • English (literature, composition)
  • History and Social Sciences (government and politics, european history, economics, psychology, world history, etc)
  • Mathematics and Computer Science (calculus, statistics, computer science)
  • Sciences (chemistry, biology, physics, environmental science)
  • World Languages and Cultures (chinese, french, german, italian, japanese, latin, spanish)

In total there are 36 different AP exams, some more common than others.

Only Borrow What You Need

A common mistake is to look at your loan limit and max it out. Instead, only use your loan as you need it and avoid unnecessary expenses.

Get a Part Time Job or Side Hustle

If you want to reduce your student loans, you can find a part-time job or an additional gig to help you bring in a little income while in school. You need to make a good strategy of how you will allocate time for school and time for work and so you will come up with extra income. Summer jobs or ideally a paid internship can go a long way.

Consider Student Loan Refinancing

You can refinance your student loan before you finish school, or after you graduate. Refinancing a student loan while studying is a bit difficult, but when you finish school it will be easier.


Students can learn how to minimize a loan while in college, they just need to follow the steps outlined in this article as a personal guide.

The post How to Minimize Student Loans While in College is part of a series on personal finances and financial literacy published at Wealth Meta. This entry was posted in Personal Finance, Budgeting
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