Savvy Spending: Couponing to Decrease Student Loan Debt

Did you know the average interest rate for a direct unsubsidized loan is 6.8 percent? Also, were you aware that to pay the interest on $6,000 at 6.8 percent is only about $34 a month? To better understand how easily student loan interest can capitalize, take a look at examples provided by StaffordLoan.com.

Example 1: You borrow a $6,000 Unsubsidized Stafford loan and you pay the interest every month for four years.

• Starting balance: $6,000
• Accrued interest: $0
• Balance when you start repayment: $6,000
• Monthly payment: $69.05
• Total interest paid for the life of the loan: $2,285.69

Example 2: You borrow a $6,000 Unsubsidized Stafford loan and you defer the interest every month for four years.

• Starting balance: $6,000
• Accrued interest: $1,632
• Balance when you start repayment: $7,632
• Monthly payment: $87.83
• Total interest paid for the life of the loan: $2,907.48.

Now, here is an example on how easy it is to decrease your student loans by paying them down. First, pull out the weekly Sunday paper and get ready to take part in the coupon craze that has been saving some people hundreds of dollars.

The average “couponer” saves $1,000 per year by simply clipping coupons, according to the Promotion Marketing Association’s Coupon Council. Imagine how you could reduce your student loan debt by using these savings to pay down your student loans. Paying down your student loans while in school can help reduce the amount of capitalized interest – therefore reducing the total amount of loan debt you will pay back over time. Coupon clipping is a simple way to come up with your interest only payments for your student loans.

There are four types of couponers:

1. The Extreme Couponer
2. The Monday to Sunday Clipper
3. The Sunday Morning Clipper with a side of Coffee
4. The spur of the moment, “oh, I found a coupon” Clipper

What type of couponer are you? Some people find themselves collecting enough coupons to fill several three-ring binders on a weekly basis, and others are lucky to see themselves using a couple coupons per month. However, either way, the final product is the same: you are saving money.

Here are a few fast facts about coupons that you may have not realized:

NOTE: Please check your local store for their specific guidelines.

1. Competitor coupons welcomed

Some stores, including: grocery, department, home improvement and electronic, accept competitor coupons. This not only is money-saving for you, but a brilliant idea for stores. Using competitor coupons saves one from having to make several trips to different stores.

2. Thou shall be price matching

This is becoming more and more common, especially for those companies that sell similar items and are conveniently located down the street from one another. However, you must realize many companies will not just take your word on the cheaper price, usually you must show proof of the cheaper item from a competing store.

3. Expired, yes please!

Believe it or not, not everything has an expiration date on it. Some stores actually accept expired coupons with no questions asked. Depending on the store policy, coupons can be used up to a certain timeframe after the expired date.

4. Double that coupon

Some stores will actually allow you to use a coupon more than once at the check-out. Many stores have several stipulations regarding this so please make sure to read their guidelines prior to getting too excited. Usually stores will have a certain day and/or timeframe for the doubling of coupons to add spark and publicity to their store. The key to this is to keep your eyes peeled for when your store will allow this.

So, what are you waiting for? Start clipping those coupons, and as you do, keep track of your savings from couponing and redirect the money saved toward paying down your student debt.