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MONEY | MATTERSAn In-Debt EducationHow to cut your student loans in half and manage your student debt.You don’t need to be afinance major to knowthat debt can be harmfulif used inappropriatelyand student loansare no exception. The FinancialTimes states that, “US universitystudents and graduates are facinga double whammy of ballooningdebts and high unemployment,raising worries that a potentialdelinquency crisis could bleed intothe wider economy.”Just think about it. When I checkedthe current federal student loanrates, they were running at 6.8percent on my loans. Currentprime rate mortgages are usuallylower than that (4.625 percent ona 30-year fixed as of July 22, 2011).They typically have a longer repaymentperiod—30 years versus thestandard 10 years for student loans.With education expenses soaring,it only takes a short amount of timeto accumulate a staggering amountof debt. I estimate the current fullcost of tuition for both undergraduateand graduate school at theUniversity of Colorado at Denverto cost around $56,300 includingtextbooks at about $100 each. Thisestimation is based on one beinga state resident and the ability totake the College Opportunity Fundtuition credit (a state tuition reimbursementprogram). Over a 10-year repayment plan at 6.8 percent,the monthly payment would be$647.90. That is more than my rent!Once you get around $100,000, thepayment is looking about the size ofa mortgage payment, but with noneof the equity asset benefits. Andthat is only if you are able to get allfederal student loans and are able toconsolidate them. Typically, privatelenders do not consolidate studentloans, so if you have to borrow privately,it can be even more difficultto pay off the debt since you will bemaking separate payments to eachlender.However, this article is not intendedto scare anyone. As mentioned,debt can be a very useful tool ifused appropriately. I have usedmany of the suggestions below anddropped my student loans frompotentially close to $50,000 (wentto community college) to under$27,000 using a few, smart financingtips. Control of your studentloans now, as with any debt, willreap many benefits for you later onin your lifetime.Get someone else to pay for yourentire educational experience.Parents, family members or evenfull-ride scholarships are greatsources when it comes to paying foryour education. However is theseresources are not available to you,the military and various employerswill also pay for all or partial tuitionreimbursement.Work your way through school.Try to pay as many “operational”expenses from your paycheck aspossible and to use your studentloans only for tuition. Even payingfor one textbook out of yourpaycheck here and there adds up. Itis also helpful to pay student loanrefunds back to student loan debtif you are not using them for livingexpenses or other necessary costs. Iwas able to make extra loan paymentsfrom my paychecks after Igraduated with my undergraduatedegree. My loans came out of defermentfor a while between degreeprograms. Since I already had thepayments budgeted in, I continuedpaying them during graduateschool and that reduced my principalbalance drastically. But if youcan’t work a full or part time job,there are many unique ways to earna little extra money here and there.Odd jobs such as pet sitting, babysitting,or seasonal work aroundthe holidays can provide additionalincome. I used a second job to payfor each of my summer classes,eliminating the need for summerstudent loans.Apply for as many scholarships asyou can. The amount of scholarshipsyou apply for canincreased your chancesof meeting your goal ofpaying for education anddecreasing your schooldebt. By paying a majorityof your tuition costsin the beginning, youwill have fewer studentloans to accrue intereston. Though studentloans are tax deductible,the interest that accruesis money that will increaseyour overall debtand not help reduce it.Regarding scholarships,there are several placesto try. First, and mostobvious, there are the PhiChi Theta Educational Foundationscholarships given out each year.You can find a scholarship applicationonline at www.phichitheta.org.This is a great resource and an under-utilizedresource. Most membersdo not apply, so your chancesof being awarded a scholarship isgreater than average. Another greatresource is your school’s financialoffice or faculty department. Forinstance, I applied for the Finance’sdepartment scholarships in myexact program that can be foundon the Business School website andwon them repeatedly. They are notwell known, but they are easy toapply for. Every $1,000 helps. Thereare also scholarship search enginessuch as fastweb.com that sends youemails when you qualify for newlypostedscholarships. The key is tomake your student loans as small aspossible.Consolidate as many loans as possible.If all of the smaller loans arelumped into one big loan, it will beonly one payment per month andit will be smaller than it would beotherwise. However, keep in mindthat you can only consolidate theloans once. That means, if you areplanning on going to grad school,you may want to postpone it, sothat you consolidate your loans1213