Ways to Decrease Student Loan DebtWays to Decrease Student Loan Debt

6 Ways to Decrease Student Loan Debt

This article has links and images regarding the suggestions that we may receive a commission if click to purchase.

Updated 20/12/2022


Compare Student loan debt with other debt such as a mortgage, car loan, medical bills, and credit card debts- federal student loan seems to be much easier to manage and pay off from time to time.

This is because students will have a higher chance to pay off their student loan debt after they graduated from University and be able to get a full-time job. In addition, they can manage their personal loan debt by taking a part-time job and living a frugal life while still at University.

If you don’t know how to control your student loan debt by creating an effective saving plan upon graduation. Student loan debt could have a big negative impact on the way of building your financial freedom later in the future.

For this reason, tackling your personal loan debt is a must to reduce and eliminate it later on. In this article, the given effective strategy of combining 7 key principles, which provides a clear road map for students to manage their student loan debt before graduating.

  • Start to save money for an emergency fund-Student loan debt
  • Stop Using Credit Cards for accumulating debt
  • Search for a Part-Time Job
  • Create a Frugal Living Budget to save money
  • Focus on Your Study to Achieve Higher
  • Use Public Transport
  • Search for lists of Student Discount and Deal

Key Takeaways

  • Best six ways to help you to decrease your student loan debt, which is considered the proven path to achieve your goal post-University- Debt management plan.
  • Credit card debt must be avoided in order to mitigate the risk of paying high-interest fees and receiving a bad credit score in the future.
  • Solely focusing on your study to achieve a high GPA grade is the most important aspect, because you will get a better chance to work for a bigger company and can pay off federal student loans, or your personal loan debt faster.


image 1760738 12536927 1623334963000

1. Start Saving Money for an Emergency Fund

The first step of your journey to reduce student loan debt is to start saving money for an emergency fund as this is considered the fundamental step to create a buffer zone in case of emergency things happen to your life.

In particular, your saving money can help to cover the cost of sudden accidents such as a car accident or losing your job. Then you can use the emergency fund to cover and even settle those issues, which you can solely concentrate on your study.

How Do I Save Money for an emergency fund While at University?

It is not almost impossible to save money while you are still a student. You can start saving money by setting a goal for each month’s budget, which requires a strong commitment and dedicated hard work from your end. For example, if you set a target of saving money each month is $20, then you would break down the saving goal into a small task- 4 weeks.

  1. Week one: 5$
  2. Week two: 5$
  3. Week three: 5$
  4. Week Four: 5$

Creating an emergency fund gives you peace of mind in terms of dealing with financial difficulties or suddenly losing your job, so you can solely concentrate on your study.

Related article: 5+ Best Free Google Sheets Monthly Budget Templates

2. Stop Using Credit Cards for Accumulating Debt

The most common financial trap student should avoid is the way they continue to build up their debt by excessively using credit cards when they don’t have the ability to pay.

The first major impact of using a credit card that most students don’t realize is the huge amount of interest fees. In particular, you will have to pay a hefty amount of your credit card debt- around 15% to 18% on top of your borrowing.

Let’s make a calculation as an example that impacts your student loan debt.

If your credit card debt limit is $5000, and in case you don’t have the ability to pay back your credit card debt before the due date. then you would have to pay ( let’s say the credit interest rate is 18%) an interest fee alone: $75 a month, $900 per year.

Next, your credit score is the second bad consequence- because you don’t have the ability to pay back your credit card on a due date regularly and keep accumulating your credit card debt through interest fees. As you know, a bad credit score will equal higher interest fees, which are applicable to your next loans such as a car loan, mortgage loan, or personal loan.

Read next: Best Budget Apps to Save Money for 2022

3. Search for a Part-Time Job ( Manage Your Student Loan Debt)

Getting a part-time job not only helps you to reduce the amount of your student loan debt, but it also helps to save more money for investing in other asset accumulation vehicles such as stocks, and high-yield saving accounts.

For this reason, a part-time job can help to cover your student living expenses such as rental fees, transportation, and food, which you don’t need to borrow more from the federal student loans. In addition, you can use saving money for paying part of your tuition fees.

Another benefit of working a part-time job is it can enhance your knowledge, work experience, and your interpersonal skill, which are considered the most important foundation step to develop your career in the future after graduation.

Moreover,  some employers offer to pay for your superannuation or pension fund, which later you can use the money to live the life you desire after retirement.

Related read: What kind of Remote Jobs Are On FlexJobs? 4 Key Facts To Know


4. Create a Frugal Living Budget to Save Money

Since you don’t have a decent amount of saving money while studying as a student. You need to create an effective frugal living lifestyle to suit your student budget, and most importantly your student loan debt is under control.

The following tips can help you to live a frugal life as a student.

  1. Taking a bike to University or classroom instead of driving can save you a decent amount of money for fuel- ( more information is in the next subheading)
  2. Concentrate on your study in order to get a good grade. This is because some insurance companies will offer a coupon code or discount for those students who get good grades from University.
  3. Know your current credit score, and you can always try to find a way to improve your credit score. The higher the credit score you have the more saving money you will receive in the future.
  4. Always use a coupon code and cashback reward like TopCashback to receive a discount while buying food or other kinds of stuff.
  5. Search for second-hand books or online books, which can save users a good amount of money every semester.

Read next: The 6 Best Personal Finance Books in 2023

5. Focus on Your Study to Achieve Higher

As mentioned above, achieving a higher GPA grade will not only help you to save money on different types of insurance policies based on the discount rate, but importantly, it also helps you to get a better job in a Fortune 500 company, the job you are deserved for hard work and commitment from University

This is because a GPA grade is one of the main factors to determine your ability to perform the job with the company. In particular, a higher grade from University can indicate a higher level of your well-organized from your student life in terms of time management, work-life balance, and leadership skills.

For this reason, getting a good pay job will definitely help to pay off your student loan debt faster.

Read next: Best Budgeting Tools for Millennials in 2022


6. Use Public Transport

Instead of driving your own car, you should consider using public transport during the first 3 years of your degree. It helps to save a massive amount of money such as car maintenance, license fee, insurance fee, and inspection fee.

For this reason, those fees from owning a car slowly get you off your personal finance track because the student loan debt keeps accumulating over time to the point, where you don’t have the ability to pay back your personal loan debts such as credit card debt, student loan debt, and car loan debt.

7. Search for lists of Student Discounts and Deals

The last step of the student management plan is to always look out for a student discount and good deals to save money on buying food, groceries, movies, and others.

In particular, I still remember back in 2017 when I was an MBA student attending Curtin University, I always looked for a cheaper deal by proving to the sellers that I am a student, which saves me a couple of hundred dollars every month.

For example, instead of paying a movie ticket for the full price of $18, I only paid $12 as a discount ticket price for a student. Another fee is a mobile phone plan, I received a discount of up to 20% on top of my paying the full price of $30 for a monthly mobile plan.

As a student, you should always search for a better discount deal in order to save money and control your frugal living budget on a good wheel. The following are several cash-back apps, students should consider using:

  • Honey: can help you find coupon codes, and discount deals to save money.
  • Upside: members will save money by receiving cash-back rewards every time purchasing gasoline.
  • Student Beans: perhaps, this is one of the best student discount apps for students to save money on their daily purchases such as restaurants, local shopping, and clothing brands.

This is because you are a student and I was too, you don’t have too much money to cover all the living expenses you desire. And the only way you can decrease your student debt is to create an effective saving strategy to create a better chance of achieving financial success in the future.

Notes, if you don’t have the ability to pay back your student debt or be able to manage your personal loan debt, or credit card debt, then you should refer to a debt consolidation loan such as federal student loans, which can help you to find an alternative way to student loan forgiveness programs, which can discharge your student loan debt.


Don’t forget to share and Join us at Jns-millennial.com for more money tips.

By Jiro Nguyen. 

The content is only based on the author’s personal opinion and experience. It is for informational purposes only, and it does not rely on as a comprehensive or a substitute for professional advice.

By Jiro Nguyen

Jiro Nguyen is a highly driven and skilled business management professional with an MBA in economics and management. He is also the founder of Jns-millennial.com. Moreover, he has a passion for writing and over 4 years of copywriting experience.