Minimizing Debt | Financial Buzz

5 Ways to Minimize College Debt

More and more people are flocking to college, racing towards the fantasy of a better future.  That is, until they realize that they might leave college jobless with hefty student loan debts to pay off.  Although current student loan interest rates vary from 5% to 6.8% (depending on the type of loan), future hikes in interest rates are likely.  To top that off, according to Credit Karma, New York ranks as one of the states with the highest student loan debt, averaging over $30,000 per student.

What can you do to lower your costs for college?  While college debt is projected to increase over the next few years, there are some effective steps that you can take to reduce your financial burden by the time you graduate—without the help of your parents.

The Community College Route

 Two-year community colleges generally have much lower tuitions than traditional 4-year universities.  Start off at a community college and transfer to a 4-year university after you complete your associate’s degree.  This can save you up to thousands of dollars in tuition depending on where you decide to transfer.  Just be cautious of the credits’ transferability.

 If the community college route fails to interest you, consider applying to The Macaulay Honors College at CUNY.  While admissions to this program are highly selective, it is the only remaining NYC-based college program that offers full merit tuition scholarships to accepted students.

Negotiate Your Financial Aid Awards

You are accepted to your dream college but are given a paltry financial aid package.  What now?  Negotiate your award with your college’s financial aid office.  True, this can be risky, but it’s worth a try (especially if you think that your college values you).  If you can prove that you truly need additional financial assistance to attend, colleges may raise your award on a case-by-case basis.  Many colleges have special circumstance appeal forms specifically for this purpose.

Room with Friends—Lots of Them

Living space in New York City is costly.  Chances are that your college’s dorms will not be a much cheaper alternative.  Most City University of New York (CUNY) colleges, for example, have room and board fees over $10,000 per academic year (not including summer).  If housing is a necessity, consider renting an apartment with some friends—the more the merrier.  Depending on the location, splitting rent with 7 or 8 friends may be a cheaper alternative in the long run.

You can even use this opportunity to build lasting friendships and expand your social network.  Who knows?  Ten years from now, the guy snoring in the sleeping bag next to you may introduce you to an opportunity for your next job!

Alternative Transportation

Chances are that you are a commuter student that spends 10% of your college life on a train.  What’s more depressing is that subway fares have continued to escalate over these few years.  The commuter student can expect to invest at least $1,000 in transportation per year.  If you are not within walking distance to your college, consider cycling to school.  NYC offers a large and expanding network of bike lanes for cyclists.  Moreover, most used bikes require relatively low maintenance and are reasonably cheap.  If bike theft is a concern, you may consider the city’s new Citibike bike share program.  This option may save you thousands of dollars by the time you graduate.

Start Your Own Business

What’s better than pushing cartloads of textbooks in a library?  Starting a business!  Interests like music, knitting, or academic tutoring (to name just a few) are marketable skills that can help create your first entrepreneurship.  Not only can these skills help finance you education, but also they can prove a worthwhile addition to your résumé.  What’s more, advertising is free on social networking sites like Facebook and Twitter.  (Check out Nana’s Kollection, an undergraduate’s crochet business advertised on Facebook, for an example.)

Tuition and other miscellaneous costs can quickly build into substantial debts.  Luckily, there are many opportunities for you to recuperate these costs and minimize your college loan debt by the time you graduate.