6 Ways to Minimize Grad School Student Loan DebtNovember 16, 2020
Embarking on your grad school journey can be an exciting time because it puts you one step closer to your dream career. But paying for grad school may cause anxiety if you are borrowing loans to cover the costs.
According to the U.S. Department of Education, in 2020 the average student loan debt from a graduate degree was $84,300. However, the cost of school shouldn’t prevent you from achieving your dreams. Here are 6 ways to minimize your grad school student loan debt:
Minimizing Graduate School Debt
If you’re looking to graduate debt-free, here are a few tips for reducing your graduate school debt:
Apply for a Stipend
If you are trying to decide which school is right for you, do your research and find out which schools provide stipends for graduate students. Certain degree programs will provide a stipend for living expenses, which will help reduce the loans you will need to borrow. The stipends may be provided for conducting research or teaching a class as a graduate assistant.
If you are fortunate enough to receive a grad school stipend, make a budget to help maximize the value of it so you can cover most, if not all of your expenses. Use some of these next tips to minimize your expenses.
Earn Money Elsewhere
If getting a stipend is not possible, look into internships or a part-time job in your field of study. Although these may be low-paying options, working outside of school will not only bring in income that can help offset your costs, but will also offer you job experience.
Reduce School Expenses
Of course you know tuition and living expenses need to be considered when paying for grad school, but be sure to think about the extra expenses too. Textbooks most likely will still be a necessary item for your program but it doesn’t mean you can’t save on the rising costs.
Try to buy textbooks secondhand from your school’s bookstore or online. You may also be able to rent your textbooks if you don’t think you will need to refer to them in the future. Although the expense of textbooks can add up, you can find ways to keep more money in your bank account.
Your wardrobe may not come into mind when budgeting for the extra expenses, but it should be something to consider. You will most likely need professional clothing for future internships or recruiting interviews. Professional clothing may be stretching your budget but a necessary expense.
If you are looking to minimize your grad school debt, you may want to consider shopping for used clothing or see if your school has an option to borrow professional clothing. Some schools, such as the University of Northern Colorado and Manhattan College, offer such options.
Reduce Your Living Expenses
You may have thought your roommate days were gone once you graduated college. If you are considering grad school, however, living with a roommate can help lower expenses. A roommate may also be a built-in study partner if you choose to live with a fellow grad student.
To further reduce your living expenses, consider eating primarily at home. Although you may not have a lot of time for cooking when you are in grad school, when you consider the savings, it may be worth the effort.
Money Under 30 explains that eating out is about three times more expensive than cooking at home. This can add up to hundreds of dollars of savings each month. To help combat the problem of not having time, try meal prepping one day each week.
When curbing your eating out, remember a coffee habit can add up, too! If you are used to grabbing a cup of coffee from a shop on your way to class, instead try brewing some at home to save yourself an average of $2.99 each time. Every little bit of savings will help you minimize your grad school expenses.
Minimizing Student Debt After Graduation
If you have already finished grad school and it feels like you’re facing a mountain of student loan debt, you still have options to help reduce your debt.
Refinance Your Loans
If you have already graduated and are employed, refinancing student loans is a beneficial way to minimize your loan payments. Refinancing is when you obtain a new private student loan to pay off outstanding student loans, whether they are private student loans or federal. You can refinance just one loan or multiple loans.
One of the benefits of student loan refinancing is the chance to lower your interest rate, thereby lowering your monthly payment. It also helps reduce interest costs over the life of the loan, which can add up to thousands of dollars. If refinancing sounds like it could be a good fit for you, use the Student Loan Refinance Calculator* for an idea of how much you could save.
Research Employer Benefits
Seek out an employer that offers student loan repayment assistance. Some employers may provide you additional money, monthly or yearly, to help repay your loans.
If you receive any money from your employer for loan repayment, try to use it for extra payments towards your loan rather than for monthly payments. Making extra payments towards the student loan principal will reduce the balance, helping you pay them your loan off more quickly and save on interest costs.
The Bottom Line
Earning a graduate degree is a big accomplishment and something you should be proud of, but it doesn’t have to mean you will be paying for your education the rest of your life. Just using a few of these strategies can help minimize the financial burden of getting your degree and set you on a strong financial path. Good luck!