Your Debt-Reduction Checklist: Before, During, and After College

This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that you consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.

College education remains one of the most significant investments many people make in their lifetime. With managing educational expenses has become a critical life skill. The key to minimizing debt burden lies in strategic planning across three distinct phases:

1. Preparation before college
2. Smart financial management during your studies
3. Aggressive debt reduction after graduation

Phase 1: Before college

✔ Start early with college savings

• The earlier you begin saving for college, the more time compounding interest has to work in your favor. Even modest contributions to a 529 education savings plan can grow significantly over time. If you’re a high school student, encourage your parents to explore these tax-advantaged accounts. If you’re an adult returning to school, consider opening one for yourself.

• Parents should aim to save at least one-third of projected college costs, with the remaining two-thirds coming from current income during college years and manageable borrowing. This “rule of thirds” provides a balanced approach that doesn’t sacrifice retirement savings for education expenses.

✔ Research and apply for scholarships

Scholarship hunting should be treated like a part-time job. Start your search at least two years before college begins, focusing on both large national scholarships and smaller local opportunities. Many students overlook community-based scholarships from local businesses, civic organizations, and religious institutions, which often have fewer applicants.

Create a scholarship calendar tracking application deadline, required materials, and follow-up dates. Apply for scholarships throughout your college career, not just before freshman year. Many scholarships are available for continuing students, and competition may be less intense.

Key scholarship search strategies include:

• Using multiple scholarship search engines ( Ascent, Fastweb, Scholarships.com, College Board)
• Checking with your high school guidance counselor for local opportunities
• Exploring scholarships related to your intended major, career interests, or personal background
• Applying for smaller scholarships ($500-$2,000) that others might overlook

✔ Complete the FAFSA early and accurately

• Submit your Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1st each year. Many states and colleges award aid on a first-come, first-served basis, making early submission crucial for maximizing your aid package.

• Gather required documents in advance including tax returns, W-2 forms, bank statements, investment records, and Social Security cards. If your family’s financial situation has changed significantly since the previous tax year, contact the financial aid office to discuss a professional judgment review.

✔ Choose your college strategically

The college you attend dramatically impacts your total debt load. Research the average debt levels of graduates from schools you’re considering, along with employment rates and starting salaries in your intended field. A less expensive school that provides strong career preparation may offer better long-term value than a prestigious institution with a hefty price tag.

Consider these cost-saving educational pathways:

• Starting at a community college and transferring to a four-year institution
• Attending in-state public universities
• Exploring colleges with strong merit aid programs
• Looking into schools with guaranteed tuition rates or tuition freezes

Check out Ascent’s Bright Future’s Engine. This ROI calculator aims to bring transparency to the college decision journey by helping students and parents evaluate the return of their college investment. The tool works by comparing the expected salary of students with their college major the first year after graduation with the cost of attendance for in-state and out-of-state colleges. Ascent’s Bright Futures™ Engine college ROI calculator scores colleges nationwide, empowering students to find the school and major that offers them the greatest return of their investment.

✔ Understand your loan options

• Federal student loans may offer better terms than private loans, including income-driven repayment options and potential forgiveness programs. Understand the difference between subsidized and unsubsidized federal loans, and review all federal aid options (as well as grants and scholarships) before considering private loans.

• If private loans are necessary, shop around with multiple lenders and understand the terms completely. Variable interest rates may start lower but can increase over time, while fixed rates provide payment predictability.

• Consider Ascent, which offers flexible student loan options to cover up to 100% of undergraduate, graduate, and/or career training program costs. Ascent stands out with competitive low fixed or variable rates, no fees¹, bigger discounts and up to 40 repayment options² – also offering non-cosigned options for eligible students – and unmatched resources to help students make smarter financial decisions throughout school and beyond with coaching and access to paid internship opportunities.

Phase 2: During college

✔ Create and stick to a budget

• College is an ideal time to develop budgeting skills that will serve you throughout life. Track your income from jobs, family support, and financial aid, then categorize your expenses into needs (tuition, textbooks, housing, food) and wants (entertainment, dining out, clothes).

• Use budgeting apps or simple spreadsheets to monitor spending patterns. Many students are surprised by how quickly small purchases add up. The $5 coffee habit costs $1,825 per year if you buy coffee every weekday during the academic year.

✔ Minimize living expenses

When thinking about the cost of college, don’t forget about what goes beyond tuition. Housing and meal plans represent major expenses and there are opportunities  for savings. Consider these strategies:

• Living off-campus with roommates after freshman year
• Choosing less expensive meal plan options and supplementing with grocery shopping
• Buying used textbooks, renting, or using digital versions
• Taking advantage of free campus activities and resources

Ascent offers the option to cover up to 100% – tuition, books, groceries, rent, parking, transport, and other monthly bills.

✔ Work strategically during college

Employment during college can reduce borrowing needs, but make sure you balance work hours with academic performance.

Seek out campus employment opportunities, which often offers flexible schedules and may relate to your academic interests. Work-study positions, research assistantships, and tutoring jobs can provide valuable experience while generating income.

Consider the following summer employment strategies that maximize earning potential:

• Internships that offer both experience and compensation
• Seasonal jobs with higher hourly wages
• Freelance work related to your skills and interests

Ascent is invested in your journey to academic, career, and financial success. That’s why we offer every borrower the opportunity to take advantage of our free-to-borrower coaching and success platform, AscentUP³, which includes 1×1 live coaching, asynchronous training tools and access to exclusive paid, remote internship opportunities.

✔ Take advantage of student discounts and free resources

Your student status provides access to numerous discounts and free services. Always look for student discounts and make sure you take advantage of:

• Student pricing for software, entertainment, and transportation
• Free campus resources like career counseling, health services, and recreation facilities
• Library resources including free access to expensive databases and research materials
• Free or low-cost campus events and activities

✔ Monitor your loan debt regularly

• Keep track of your accumulating debt by logging into your federal loan servicer’s website regularly. Understanding your current debt level helps you make informed decisions about additional borrowing and motivates you to seek alternatives to loans when possible.

• Consider making small payments on unsubsidized loans while in school to prevent interest capitalization. Even $25 monthly can significantly reduce your total debt over time!
  • Not only does setting up autopay make monthly payments a breeze, but when you sign up, you get a discount on your interest rate. With Ascent you can save money with an 0.50%-1.00% autopay discount⁴.

✔ Graduate on time

Time is money when it comes to college expenses. Strategies to graduate on time or early include:

• Meeting with academic advisors regularly to ensure you’re on track
• Taking summer courses if needed to stay on schedule
• Considering course overloads when manageable
• Using AP credits, CLEP exams, or dual enrollment credits to reduce required coursework

Phase 3: After college

✔ Understand your grace period and repayment options

Most federal student loans offer a six-month grace period after graduation before payments begin. Use this time wisely to secure employment, create a budget, and understand your repayment options rather than simply hoping for the best.

Federal loan borrowers have access to several repayment plans:

• Standard 10-year repayment plan (highest monthly payments, least total interest)
• Income-driven repayment plans (payments based on income and family size)
• Extended repayment options (lower monthly payments, more total interest)

Ascent, a private student loan option, offers a generous 9-month grace period⁵ (vs. 6 months for most federal loans) and multiple flexible repayment plans—including Deferred Repayment, Interest-Only, $25 Minimum Payment, and Immediate Repayment—giving you time and control as you transition after college.

✔ Create a post-graduation budget

• Your post-college budget will likely look dramatically different from your student budget. Account for new expenses like professional clothing, transportation costs, and higher housing standards, while incorporating student loan payments as a non-negotiable expense.

• Follow the 50/30/20 budgeting rule as a starting point: 50% of after-tax income for needs, 30% for wants, and 20% for savings and debt repayment beyond minimums. If your student loan payments exceed what fits comfortably in this framework, consider income-driven repayment plans or less aggressive debt payoff strategies.

✔ Implement debt reduction strategies

Several proven strategies can accelerate your debt payoff:

• The Debt Avalanche Method: Pay minimums on all loans while directing extra payments toward the loan with the highest interest rate. This approach minimizes total interest paid over time.

• The Debt Snowball Method: Pay minimums on all loans while directing extra payments toward the loan with the smallest balance. This approach provides psychological wins that can maintain motivation.

• Biweekly payments: Split your monthly payment in half and pay every two weeks instead of monthly. This results in 26 payments per year (equivalent to 13 monthly payments) and can reduce a 10-year loan term by over a year.

✔ Maximize your income

Your earning potential is your greatest wealth-building tool. Strategies to increase income include:

• Negotiating your starting salary and seeking regular raises
• Developing skills that increase your market value
• Pursuing side hustles or freelance work

AscentUP³ has great tools for borrowers on how to increase your earning potential and tools for negotiating your salary!

✔ Take advantage of employer benefits

Many employers offer student loan repayment assistance as a benefit. Even if your current employer doesn’t offer this benefit, it’s becoming increasingly common and worth asking about during job negotiations.

Maximize other employer benefits that free up money for debt repayment including:

• Contributing enough to your 401(k) to receive full employer matching
• Using health savings accounts (HSAs) for tax advantages
• Taking advantage of flexible spending accounts for predictable expenses

✔ Consider loan forgiveness programs

Several federal programs offer loan forgiveness for qualifying borrowers, including:

• Public Service Loan Forgiveness (PSLF) for government and qualifying nonprofit employees
• Income-driven repayment plan forgiveness after 20-25 years of payments

These programs have specific requirements and application processes, so research thoroughly and maintain detailed records if you pursue forgiveness.

Technology tools and resources

Leverage technology to streamline your debt management:

• Loan servicer mobile apps for payment tracking and account management like
• Budgeting apps like Mint, YNAB, or Personal Capital.
• Debt payoff calculators to model different repayment strategies.
• Automatic payment setup for potential interest rate reductions.

The bottom line

Managing college debt effectively requires strategic thinking across multiple years and life phases. By implementing the strategies outlined in this checklist, you can minimize the debt you accumulate and accelerate payoff after graduation. The key is to start early, make informed decisions throughout college, and maintain focus and discipline in your post-graduation debt reduction efforts.

Remember that education debt, while significant, is typically considered “good debt” because of its potential to increase your earning capacity. The goal isn’t necessarily to avoid all educational debt, but rather to borrow thoughtfully and repay strategically. With proper planning and execution, you can achieve your educational goals while maintaining long-term financial health and building your credit score.

There’s always JG Wentworth…

This blog post is brought to you in partnership with JG Wentworth and Ascent Funding, working together to help students make smarter financial choices.

If you have $10,000 or more in unsecured debt there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include: 

• One monthly program payment 
• We negotiate on your behalf 
• Average debt resolution in as little as 48-60 months 
• We only get paid when we settle your debt  

If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?