Graduating Debt-free: Strategies For Minimizing Student Loan Borrowing – After spending four challenging years earning a college degree meant to maximize your financial future, there’s nothing more disappointing than starting your new life with a huge pile of student loan debt. While most of these are probably unavoidable, depending on the size of your student loans, there are steps you can take to effectively manage and minimize debt in the future.

College graduates leave school with a collective $1 trillion in student loan debt, so it’s critical that students take advantage of every possibility to minimize debt. Explore all your scholarship and financial aid options, even if you don’t think you qualify, because you may be pleasantly surprised. Work part time during the school year; full time in the summer. Avoid credit cards (at least until your senior year). And if you have unspent student loan money, resist the temptation to spend it on extras and return it to the lender.

Graduating Debt-free: Strategies For Minimizing Student Loan Borrowing

Graduating Debt-free: Strategies For Minimizing Student Loan Borrowing

A credit card in your name can help establish the kind of money-saving credit history you’ll need after graduation, from renting an apartment to starting utilities to getting insurance. However, it may be tempting for college students who are pinching cash to max out cards, racking up debt that haunts them far beyond graduation. Avoid this trap by waiting until your senior year to get a credit card in your name, as it only takes six months to build credit. If you have trouble qualifying for an unsecured credit card, get a secured credit card, which can help build good credit. Once you are proven to be a responsible borrower, you will have no trouble upgrading to the unsecured version with the same lender.

Tips For Student Loan Management

The only way to prove yourself responsible with credit is to use it. So while you don’t want to max out your credit card, you also don’t want to let it collect dust in your wallet. Make it a habit to use your credit card, but only for essentials to avoid buying things you don’t need. Paying your regular monthly bills, such as your phone bill or electricity bill, with a credit card is a good way to go.

Try to avoid paying interest charges by getting into the habit of resetting your credit card balance to zero each month. This means, of course, only charging the card as much as you can roll around and paying cash.

Before you graduate, find out the exact date you’re expected to start making your monthly student loan payments, as well as the amount. If yours is a federal loan, you’ll automatically be put on a 10-year repayment plan. While you can extend the term of this loan, do your best to manage it over 10 years. While renewal will lower your monthly payment, it will also increase interest, increasing the amount you will actually pay out in the long run.

Sit down and calculate the ratio of your monthly income to expenses. Considering student loans, rent, utilities, food, and other necessary expenses, subtract them from your paycheck, and you’ll know how much is left for savings and extras.

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Living expenses are sizable without factoring in fees for late payments, from rent and car payments, to utilities and credit cards. So instead of waiting until the last minute and potentially missing a payment by as little as a day, get into the habit of paying your bills early — if you can swing it, as early as they arrive.

If you’re in the habit of pinching money in college, it shouldn’t be too hard to keep doing the same thing after you graduate. Of course, you want to acquire the nice things, but that can wait a year or two as you enter a new stream of life, experiencing first-hand what things cost, what you can afford, and what is really important to you in terms of future finances. investment.

The emphasis at this point is not so much about quantity as it is about quality. At first, the benefits of saving will be more in cultivating a habit than a pile of cash. As long as it’s a built in behavior in your financial life, the size of your savings will naturally grow as will your income.

Graduating Debt-free: Strategies For Minimizing Student Loan Borrowing

The better your credit score, the better terms you can get from lenders. The last thing you want to do is assume that just because you made timely payments to your creditors, your credit report is in top shape. Credit reporting bureaus do make mistakes, and it’s your responsibility to catch them. And even though you may not be thinking about buying a house or a car anytime soon, it’s still important to manage a credit history now that will affect you for years to come. You are entitled to one free annual report from each credit agency. Request your copy through

Solutions To Student Loan Debt (minimize Your College Debt)

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Edited by Nell McPherson Edited by Nell McPherson Right Arrow Former Banking editor Nell McPherson is a former banking editor at , where she led a team of reporters dedicated to helping readers make the best decisions about their savings and checking accounts, CDs, and money market accounts. Connect with Nell McPherson on LinkedIn LinkedIn Nell McPherson

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Graduating Debt-free: Strategies For Minimizing Student Loan Borrowing

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Graduating from college is an exciting time, but it can also be overwhelming, especially when it comes to finances. Students are preparing for some big financial milestones before they graduate, including getting higher paying jobs, building credit and taking on more financial independence.

But students do too

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