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6 Ways to Minimize the Size of Your Student Loan

How much is too much when it comes to student loans?

That can be a hard question to answer, especially when you’ve never dealt with student loans before. Generally, keeping loan payments under 15% of your expected post-graduation salary is preferred, while going any higher than 36% can be risky. (To calculate these numbers for your school and major, use our free NitroScore tool.)

If you still can’t get the numbers to work, even after applying for FAFSA and taking into account other sources of college money, there may be some other options you can consider.

Here are six ways to reduce the amount of money you need to borrow for college:

1) Appeal your financial aid award

Believe it or not, your financial aid allocation is not necessarily set in stone. In fact, it can pay off to appeal your award if certain circumstances apply to you.

For example, if your financial situation has changed because of unemployment, divorce, or another issue, you should definitely appeal.

Another reason to appeal might be that a large portion of the income you listed on your FAFSA has to go toward debt, leaving you with less money for tuition.

You may also want to make an appeal if special circumstances may have affected your grades, and therefore, your ability to secure certain types of grants or scholarships. For instance, a diagnosis of a serious medical condition, a death in the family, or the loss of a pregnancy are all factors that could have a negative impact on your GPA.

(For more info, see How to Write a Successful Financial Aid Appeal Letter.)

2) Save Money Now

Any money you can put down toward your education is less money that you have to borrow.

If you have time before you start school, get a job (or a second job) and start socking money away. You can also plan to get a part-time job while you’re in school and to use school breaks to get in extra hours.

Even if you feel like it’s impossible to put a significant dent in your tuition, you may be able to make enough to cover your room and board, books, or other living expenses. That could shave thousands of dollars off of your loan debt.

To make sure your money goes as far as possible, consider using any number of free online budgeting tools to help track and forecast expenses. Mint.com and YouNeedaBudget.com are two established and well-reviewed options that you might want to check out.

3) Join The Military (Or Be Related To A Military Member

Serving your country can be a great way to save on college.

After serving in the military, you may be eligible for complete tuition reimbursement at a public school through the GI Bill. This program even offers housing assistance and a one-time relocation credit in some cases.

GI Bill benefits are also transferable to family members. So if you have a spouse or parent who is in the military and hasn’t used their benefits, you may be able to redeem their credits. (Click here to learn more about the GI Bill.)

Military service members may also qualify for tuition assistance to attend school simultaneously while completing their military service.

4) Defer Enrollment

Time can do wondrous things. Waiting to start college to build up your savings can be a smart way to avoid getting saddled with crippling debt later on.

Many schools will let you defer your enrollment for a year (or even two) after you’re accepted.

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5) Consider A Less-Expensive School

Starting at a community college is a great way to knock out some credits without racking up lots of debt. If you plan to transfer to another school at some point, check to make sure the classes you’re taking will transfer with full credit.

You might also consider going to an in-state public college. Because state schools are subsidized by the states where they’re located, in-state tuition is often far less expensive than at private schools.

6) Live At Home

Choosing a school you can commute to may be one of the most effective ways to cut down on costs. Getting involved with extra-curricular activities can help ensure that you’re still engaged in campus life.

The payoff of starting on better financial footing after graduation may be worth the compromise.

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