Personal Finance

Here are 3 ways to avoid taking on too much student loan debt

Key Points
  • Without a long-term solution for rising student loan balances, college-bound students need to minimize their debt burden.
  • Here are three ways to reduce the amount you borrow at the outset.
Student loan payment freeze extended through end of summer
Student loan payment freeze extended through end of summer

Recent graduates may have just gotten an extended break on their student loan payments, but college debt remains a substantial hurdle for nearly everyone with a degree.

"Attending and affording college can be next to impossible without taking out a student loan, thanks to the exponential rise in college tuition," said analyst Sarah Foster.

Since so many students borrow to cover at least a portion of the cost, outstanding education debt now exceeds $1.7 trillion.

"Student loan debt is a major burden that follows borrowers around throughout every major financial decision, from moving out and buying a home, to saving for emergencies and retirement," Foster said. 

But there is another way. Experts say reducing the amount you borrow at the outset will go a long way to easing your long-term debt burden. Here are three ways to do that.

1. Fill out a FAFSA

Students must fill out the Free Application for Federal Student Aid to access any kind of assistance, including scholarships and grants.

Unlike student loans, scholarships and grants are essentially free money, which means they do not need to be repaid.

The U.S. Department of Education awards about $120 billion every year to help students pay for higher education. And beyond federal aid, you could also be eligible for financial assistance from your state or college.

Paying for college: What you need to know
Paying for college: What you need to know

Year after year, high school graduates miss out on billions in grants because they don't fill out the FAFSA. Many families mistakenly assume they won't qualify and don't even bother to apply.

2. Tap private scholarship money

In addition to the gift aid offered by government and colleges and universities, there are many private scholarships available, often funded by foundations, corporations and other independent organizations. 

Free scholarship search sites, such as and, also match a student's background against a database of scholarships.

You don't need to be the top-ranked person of your class to win a scholarship.
David Tabachnikov
CEO of ScholarshipOwl

"You don't need to be the top-ranked person of your class to win a scholarship," said David Tabachnikov, CEO of scholarship search site ScholarshipOwl.

"Scholarships award all types of students like those pursuing a STEM major or students who live in Indiana."

3. Negotiate a better deal

Consider your financial aid award letter a starting point.

Many schools, even Ivy League ones, are often receptive to appeals for more aid — they just don't advertise it, said Stuart Siegel, the president of FAFSAssist.

But first, make sure you understand the difference between scholarships and loans, whether those funds are renewable for all four years and if they come with contingencies such as maintaining a certain grade point average.

Then, reach out to the school's financial aid office and frame the conversation depending on the type of aid you are seeking.

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If there are need-based issues beyond what was noted in the financial aid paperwork, such as an older sibling who moved back home after college, care for elderly grandparents, increased health-related expenses or the loss of a job, those should be explained to the school and documented, if possible.

Alternatively, if the financial aid packages from other, comparable schools were better, that is also worth bringing to the school's attention in an appeal for more merit aid.

"Given the circumstances right now, colleges are very eager to hear from families," Siegel said, and "I'm seeing colleges willing to step up to the plate to offer more money."

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