Paying Off Student Loans While Still in College - Tips, Advice

Us college students have so much on our plate-exams, papers, rent, and a whole lot of socializing. When the start of the semester comes around, those student loan checks come in and we go crazy, completely pushing off reality: we're going to have to pay them back. It seems so commonplace these days to have thousands of dollars owed toward student loans, but we all assume that with our handy college degrees that we'll pay off those thousands within a few years. The harsh reality is that we'll likely be paying off our student loans for a few decades. Especially in light of a rough economy, it's less likely that you'll get that dream job rolling in the thousands. Why is it important that you start paying off your student loans now, then, you ask? One word: interest.

Even while you sit in your classes (or if you're like so many people I know, while you're not sitting in class) you are accruing interest. If your student loans have outrageous interest rates like mine (read: 14% or so), that adds up really quick. So at the very least you should be attempting to pay the interest on your student loans. You'll save yourself thousands of dollars in the long run if you start practicing proper debt management and start paying down those pesky student loans.

What do I mean by debt management? I mean understanding the workings of not only your student loans, but any other debt you may have accrued. Start by making a list of all the debt you have currently. Don't make excuses. You're a college student and can likely access all of this information via the internet. List every credit card, every car loan, every student loan, along with the interest rate for each one. Proper debt management starts with being organized. If you're computer savvy, try using a simple program such as Microsoft Excel.

The key to proper debt management is to pay off the debt with the highest interest rate first. So look at all those credit cards and student loans you listed, and determine which has the highest interest rate. This very well may not be your student loans. Credit cards tend to be a bit heavier on the interest, so attack those first.

Now that you know which credit cards or student loans you need to start working on, the next step to debt management is figuring out where that money is going to come from. As a college student, I don't imagine you have a huge income source. I can speak from experience, however, in saying that a little goes a long way.

Write out a budget. I know, those words sound painful. But it is essential for you to pay off those student loans and get your debt under control. Make sure you allot money for rent, cell phone, utilities, groceries, transportation costs, clothes, any school expenses, everything and anything you may spend money on over the course of the month. Make sure that you have realistic expectations when creating this budget-if you don't, you'll only discourage yourself and you'll end up throwing this wacky debt management advice out the window.

Once you've created a budget, determine your approximate income, and then see how much you have left. This could be an eye-opening experience. Perhaps you're spending more than you're making. Perhaps your student loans aren't the worst of your problems. I'm not suggesting that if you can't manage to buy groceries you should work on debt management. Knowing where you stand, however, is incredibly important.

Take a look at where you've been spending money recently. Are they all necessary purchases? We've all heard it-you need to understand needs vs. wants. When you go to make a purchase, think about how important it is to you, if you could live without it. Is it more important to you to buy that particular item, or would you rather put that money towards student loans or credit card debt? Though it may not seem like terribly fun spending, paying off student loans will be much more worthwhile than one more pair of shoes in the long run.

When you're practicing good debt management, you'll be able to pinpoint where you can cut back. Perhaps you don't have to shop at the most expensive grocery stores. You can certainly eat healthy on a budget with a little creativity. Clothes, again, are a big spending category that doesn't necessarily have to be so. You may be dropping $5 here and there on campus for subway, when you could just as easily bring a sandwich from home for much less. If you live in a dorm, find free activities on campus rather than spending a ton on entertainment. Don't forget that many libraries carry a variety of DVD's and CD's, so there's no reason to spend a ton at Best Buy. All of this cash you free up can be put towards student loans and debt management.

Another great way to pay off student loans is to create additional income. There are a variety of ways to make money, even on a student's time frame. Right now, I juggle a full time job and 12 credit hours. I also do freelance writing, and tutor once a week. Look on Craigslist and other similar classifieds websites for opportunities on the weekend, or on breaks (but be wary, and safe at all times when using these sites). You can funnel all additional income right to your student loans or credit card debt. Remember that every little bit helps.

Debt management isn't rocket science, you just can't get in the trap of thinking that one day all of those student loans are going to just vanish. Being aware of your situation and taking steps to eliminate student loans will more than certain pay off in the future. The only other advice I can give you is to go to class! You're going to really need that degree when it comes to paying off the bulk of your student loans, so get involved and set yourself up to succeed in your career path. Good luck to you, and keep your eye on the prize!