Minimizing Your Student Debt While In School

While it may be impossible for you to stay out of debt completely while you are in school, they are definitely ways to borrow less. Here are some tips for how you can minimize your debt while in graduate school. A special thanks to Darryl Dahlheimer Program Director of Lutheran Social Service Financial Counseling Service for helping me create this list!

  • Live Like A Student: While you may be a graduate student, you are still a student so you should adjust your expectations accordingly. Think about how you can “live like a student” in every aspect of your life. This might mean living with roommates rather than getting your own place, forgoing a car and taking the bus or biking, cutting your food expenses by making rice and beans a staple of your diet, reducing your phone plan to include only the things that you need, and opting for a stay-cation in lieu of a more expensive, exotic vacation.
  • Track Your Spending: Did you know that a $3 coffee drink five times a week can cost you $60/month or $720/year? Small purchases can really add up! Often times, we don’t even know where our money is going. Take up the discipline of tracking your spending. Write down each expense/purchase rounding to the nearest dollar. After a few weeks you will begin to see some patterns of where your money is going, knowing these patterns can help you cut excess spending.
  • Discretionary Cash: One way I have found to cut my discretionary spending is to use cash. I budget a certain amount for discretionary spending each month (eating out, recreation, concerts, snacks, etc.) and take out the money in cash. I can spend the money on whatever I like but I only have a certain amount and when it is gone, it is gone. Using cash helps you to physically see where your money is going and how much you have left.
  • Return the Money that You Don’t Need: Loan money is NOT FREE MONEY! It might be enticing to just take all of the money offered to you so that you can buy something new, but this will definitely hurt you in the long run. Make a budget of what you need for school and what you need to live on and don’t take out any more than you need. That being said, don’t forget to account for unexpected expenses so you are not stuck if something comes up like car maintenance or an unexpected trip.
  • Adjust Your Schooling to Borrow Less: This may not be an option for everyone, but if you can you might adjust your schooling so that you don’t need to borrow as much. You might begin your education online, spread out your classes over time or find a way to condense your education to three years instead of four by taking advantage of summer classes.
  • Hunt for Free Money: There is a lot of grant and scholarship money available from a variety of organizations and corporations. It is worth your while to spend some time searching for some of these hidden treasures. Even $500 or $1000 can make a big difference. Be creative by searching not only by your education area but also by your interests. You could be the next recipient of a canoeing scholarship! Check out to search for scholarships and grants.
  • Get a Job: A job can help you take out less loans or even start paying off your loans. However, a job can also be dangerous if it overwhelms your schooling. Make sure you find a job that you can balance with your school work, there is no sense in accruing loans for something that you don’t have the time to invest in!
  • Pay Attention to Your Loans: Keep track of how much you owe in both interest and principal. Some schools allow you to take out subsidized loans, if you have the option to shift some of your unsubsidized loans to subsidized loans you will save a lot of money in interest. Also, if you can pay your interest while you are in school that will also save you quite a bit of money in the long run.
  • LSS Financial Counseling Service:Lutheran Social Service (LSS) of Minnesota offers free budget and debt counseling. They have expert coaching for student loans. They also have debt management plans to help people paying off Credit Card debt and avoid scams for a nominal monthly fee. Call their toll-free number 1-888-577-2227 to set up a phone appointment or an in person appointment at one of their three area offices. You don’t need to be Lutheran or a student to benefit from their services!

Join the Conversation: What strategies have you tried for minimizing your student loan debt while you are in school?


One thought on “Minimizing Your Student Debt While In School

  1. Pingback: Student Loans: The Best-Kept Secret in Higher Education | frugalcommunity

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