7 surprising ways to minimize student debt

Rambo says students can also get a leg up on their competition by volunteering or interning while in college. A study by the National Association of Colleges and Employers reveals that this year companies expect to draw 40 percent of new college hires from internship and co-op programs.

Attend summer school

If you'd like a sweet 25 percent discount on college costs, hit the books this summer.

"If you can get your degree finished in three years by taking more courses than the normal, average 12 credits or taking summer courses, that will save you money," says Kosboth.

Most four-year institutions require students to complete 120 credit hours -- approximately 15 credits per semester -- to graduate with a bachelor's degree. Students who take just one extra course per year, either during summer school or on top of a regular course load, can graduate a full semester early, which translates to an average savings of more than $10,000, according to the National Center for Education Statistics.

Pay the interest

Taking a job or paid internship while in school can also help keep student loan interest in check, says Rambo. While students with unsubsidized Stafford loans aren't required to pay loan interest while they're in school, they'll save a bundle if they do. According to, students who borrow $27,000, the maximum Stafford loan allowance for those who graduate in four years, will finish college with nearly $2,300 in capitalized interest tacked onto their student loans -- that is, if the undergrad Stafford loan interest rate remains at 3.4 percent, an optimistic assumption.

Pass the buck

"It's been proven in study after study that a student who has a financial stake takes (their education) more seriously," says Robert Mendenall, founder of The College Funding Center of South Carolina, a college planning firm in Columbia. "They go to class, they graduate on time. When the parents write a check, it's a little different."

Requiring students to max out their federal loan options before taking out private or Parent PLUS loans can save money, too. For the 2011-2012 school year, Stafford loans for dependent undergrads have a fixed interest rate of 3.4 percent , whereas PLUS loans have a fixed interest rate of 7.9 percent and private loan rates can soar well into double digits. Stafford loans also come with income-based repayment and loan forgiveness options that aren't available on PLUS loans. In certain circumstances, this means your student might not have to pay back all of those loans after all.



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