Student Loan Advice

A college degree is a great investment in your future. But if you're not careful, you could be paying off student loans for many years.

Americans owed about $1.65 trillion in student loans in mid-2026, according to the Federal Reserve Bank of New York. Around 10.6% of that debt was 90 or more days behind on payments.

Financial advisors from across the United States have shared advice on how students can reduce their debt and find the best way to repay it. Here are 10 of their tips.

1. Understand the FAFSA

The Free Application for Federal Student Aid (FAFSA) helps decide how much you'll need to pay out of pocket for your education. States, colleges and the federal government use it to award scholarships, grants, work-study and student loans.

Filling it out can lower the overall cost of your education and your debt, so you pay less out of pocket.

2. Only borrow what you need

Don't automatically take out the maximum loan amount you're offered. Work out what you actually need, or work with a college planner, and borrow only that.

Don't borrow money to fund a social life in college. You'll regret it in the long run.

3. Watch your loan-to-income ratio

Try to keep your total student debt no higher than the salary you expect to earn in your first year after graduating. If you expect to earn $35,000 a year, don't borrow more than $35,000 in total.

This rule of thumb doesn't fit every career. Future doctors, for example, often borrow more because their expected earnings are much higher.

4. Look for ways to borrow less

Before taking out a student loan, look at ways to cut what you need to borrow:

• Apply for scholarships.
• Go to a community college for the first two years.
• Get a part-time job and put the money toward tuition.
• Buy or rent used textbooks.
• Compare the cost of on-campus and off-campus housing.

5. Compare your loan options

There are federal subsidized and unsubsidized loans, Parent PLUS loans and private student loans. Compare interest rates, and check whether each rate is fixed or variable.

Federal loan limits changed on July 1, 2026. Grad PLUS loans are no longer available to new graduate borrowers, and Parent PLUS loans now have yearly and total limits. Check the current limits at studentaid.gov before you plan how to pay for school.

6. Think about the opportunity cost

Money you put toward student loans is money you can't put into an emergency fund or a down payment on a home.

For example, if you borrow $50,000 at 6% interest on a 10-year plan, you'll pay about $555 a month. Over those 10 years, you'll pay back the $50,000 plus about $16,612 in interest. That's a lot of money.

7. Be wary of high tuition

Some for-profit schools charge high tuition and make big promises about jobs after graduation. State universities and community colleges usually cost less, especially if you haven't chosen a major yet.

8. Don't overpay for your degree

Some people go to expensive colleges and then take lower-paying jobs. There's no need to spend $100,000 on a degree for a career with a modest salary. You can start at a state school or community college and transfer to finish your degree.

Working in public service is a noble choice, but it doesn't require a high-priced school.

9. Stay in state

Look for affordable schools in your own state. Public universities get part of their funding from state taxes, so they usually charge residents much less than out-of-state students.

Some states, like California, have some of the best public universities in the world.

10. Look into Public Service Loan Forgiveness

If you plan to work for the government or a qualifying nonprofit, look into Public Service Loan Forgiveness (PSLF). Your remaining federal Direct Loans can be forgiven after 120 qualifying monthly payments while you work full-time for a qualifying employer. Military service counts too.

Public service jobs often pay less than private-sector jobs, which is one reason this program exists. Forgiveness under PSLF isn't taxed by the federal government.