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Phoenix Forward magazine

7 ways to reduce student loans

Options for college tuition


Like many students, you’ll likely need some financial aid to help pay for college. But student loans aren’t your only option — and should be carefully considered after reviewing other available options. Here are seven ways to pay for your education:



“We encourage our students to seek out as many scholarships as possible,” says Amanda Hendricks of the University of Phoenix scholarship team. Hendricks advises looking to your own affiliations for scholarships. “Check with your employer, professional organizations, your family members’ employers, your church or any clubs you belong to,” she says. “Many of these organizations offer scholarships for their employees and members.”

If you qualify, Hendricks suggests researching scholarship programs specifically for ethnic minorities and Native Americans. She also recommends checking the University scholarships page and websites such as Scholarships.com and Fastweb.


Public and private sources can provide grant money, says Laura Ishmael, a member of the University’s student experience team. “The federal Pell Grant is the best known type of grant, but there are others,” she says.

A number of state governments have programs for residents, and the federal government offers specialized programs, such as the TEACH Grant for aspiring educators and the Federal Supplemental Educational Opportunity Grant (SEOG) program for low-income undergraduates.

Tuition-reimbursement programs

Many employers offer this benefit. The programs often require employees to pay tuition up front, to be reimbursed later if specific criteria are met, such as achieving certain grades or taking job-related courses. “Talk to your HR department about your employer’s requirements,” Ishmael says.


Family and friends can help cover your education costs through inheritances, gifts, 529 plans or fundraising. Gifts from family members or friends are subject to state and federal tax laws, she notes.

The Upromise® program, for example, “allows students to set up personal fundraising accounts that generate money based on other peoples’ purchases [at participating retailers],” explains Chris Conway, a personal finance expert and member of the University’s repayment team.

Personal savings

As a working student, you may have accumulated money you can use for your education. “Savings, investments, 401(k)s and IRAs are all possible funding sources, but some of them have withdrawal penalties,” Conway emphasizes.


“Budgeting can free up money that you can then apply to tuition, even in small amounts,” Conway says.

Meanwhile, maximizing transfer credits with the University’s Prior Learning Assessment process is a good way to reduce tuition costs, Hendricks notes. “You may be surprised how many credits you’re eligible for,” she says.

Student loans

Once you’ve exhausted other funding sources, student loans can make up the difference. “If you have to borrow money, it may make sense to borrow as much as you need from federal sources, because federal loans generally have more favorable repayment terms,” Conway says.

Private loans are not subject to the strict lending rules that federal loans are, and their terms can be confusing, she emphasizes. “They often have high interest rates, no forbearance [deferment] options, may require a co-signer, and they’re tied to your credit score,” she says. “If you consider any private loans, make sure you ask a lot of questions before signing anything.”

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