More than 37 million Americans who have taken out student loans to pay for their higher education now find themselves mired in debt during a slow economy where quality jobs are scarce. Here are 7 ways 20 somethings can save money to pay off student loans.

Create a Budget and Stick to It

Creating a budget and committing to it over the long term is an essential part of money management, particularly for those intent on 7 ways 20 somethings can save money to pay off student loans.

The name of the game in budgeting is always income(s) versus expenses. Record everything, every purchase (debit), from food to entertainment, to monthly credit card and student loan payments, and every source of income (credit), from money paid to your through your job(s) to the interest earned on any bank accounts you hold.

The best way to keep your budget up and running smoothly is to have a filing system: One file for receipts, which you enter daily or at least once per week in your budget log, and one file for incoming funds – pay stubs and the like. A spreadsheet application such as Microsoft Excel, Quicken Starter or Mint will help you keep your credits and debits in order and will also drastically lower your margin for error by tallying your totals.

For free budget templates visit – http://www.budgetsaresexy.com/2009/07/free-budget-templates-sites/

Live Thrifty, Live Well

Second of the 7 ways to 20 somethings can save money to pay off student loans involves trimming back expenses on a month-to-month basis. There are ways to accomplish this in your day-to-day life without feeling like you are depriving yourself.

Need new clothing or see a style you like? Try a thrift store before you hit the department store or boutique. Lots of thrift stores nowadays carry up-to-date and stylish alternatives to full-price mainstream vendors.

Break out your bicycle, stretch your legs with a walk, or take public transportation to save money you would otherwise be spending on gasoline. The first two options will do double duty as exercise, which will give your physical and mental powers a nice boost, and public transportation can be interesting if you enjoy people-watching.

Go for the used text books instead of brand-new ones. Many text books will still be in great shape when you get them, since accredited texts for classwork tend to change every few years and since many students opt to resell the texts back to the bookstore when they are finished with each class.

Pocket the cash you would normally spend each day for lunch and dinner out by brown-bagging your lunch. There are some great lunch-tote products on the market these days, some even boasting separate chambers for keeping hot foods/beverages hot and cold items cold. Check out 10 brown bag lunch ideas and from a guest post on Club Thrifty from ThisThatandTheMBA Tips to Save Money While Shoping For Presents

Start by creating a list of all the people you need to buy Christmas presents for and a realistic budget for which you are trying to get all of your shopping done within. Obviously set aside a little more for people you may have overlooked. You may also want to include in your budget if you give to charitable organizations or toy drives.

SmarterBank to Earn Points Towards Paying Down Your Student Loans

The student loan information Web site, SimpleTuition, has partnered with SmarterBank and rolled out a new way to pay down student loans. The program, dubbed SmarterBucks, requires program participants to get an on line bank account and Visa debit card through the FDIC-member, SmarterBank. Participants will then earn a small percentage on the money they spend with their SmarterBank debit card, which will be put toward paying down their student loan of their choice.
We reviewed SmarterBank in a previous article, which you can check out here: https://www.paymystudentloans.com/smarterbanks-review/

SaveUp.com

One new program in the 7 ways 20 somethings can save money to pay off student loans comes in the form of SaveUp.com, which encourages participants to save money and pay down their debt through a system of rewards points. These rewards points allow users to enter contests for up to $2 million in cash, as well as other prizes, thus turning savings and debt pay-down into a game, not only of chance, but of inspiration to keep up the good work. We reviewed SaveUp.com a few weeks ago and were excited to learn how successful SaveUp's business has become. https://www.paymystudentloans.com/saveupcom-student-loans/

Loan Forgiveness Programs

There are currently several programs out there which offer loan forgiveness in exchange for work. While forgiveness isn't technically saving money, per se, the money you earn to put towards your student loans can be counted as money saved since you will come out ahead in the long run.

• Teacher Forgiveness Program: Teachers who teach for five years at low-income or high-risk schools, and who make their payments during that five year time period, can get up to $17,500 on their loans forgiven. This is a federal program.
• Americorps: Americorps has a program which allows you to earn money to put towards your student loan by working for a year at a specific Americorp service. The award amount in 2011 was $5,500, and you will get health coverage in addition to deferring payment on your student loan for that working year.
• TeachAmerica: TeachAmerica will award $10,700 towards payment of your federal student loans when you complete a total of two years teaching through their organization. You will most likely be teaching in high-risk schools during this time, and be sure to check that you are still eligible for the ward if you worked previously with Americorps.
• Public service worker programs, income-based loan forgiveness, federal direct loan consolidation, and private student loan forgiveness are also available. Go to http://www.studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service for complete information on these programs.

Go For The Grant or Get That Scholarship

There is indeed free money out there to help you with your student loans but your aren't going to get it if you don't do your homework. For federal grant research, start by completing the Free Application for Federal Student Aid (FAFSA) at http://studentaid.ed.gov/fafsa This comprehensive government Web site not only provides the application, but offers help with filling out the form and contains several links to answer your questions. Grants and scholarships can be offered not only by the government but also by private institutions, non-profit organizations, churches, schools and/or employers, and the criteria for eligibility can vary greatly. Check out https://www.paymystudentloans.com/grants-to-pay-off-student-loans/ for a list of possible grant opportunities, and http://www.collegescholarships.org/ for more information on scholarships.

Tight Financial Squeeze? Try Forbearance or Deferment

Last of 7 ways 20 somethings can save money to pay off student loans, if you find yourself in tight spot financially, you may want to petition Uncle Sam for a loan forbearance or deferment. Both programs allow you to stop making payments or make reduced payments on your student loans for a prearranged amount of time. You'll need to have a Federal Perkins Loan, Direct Subsidized Loan or a Subsidized Federal Stafford Loan for the government to pay your interest during deferment. For more information, check out http://studentaid.ed.gov/repay-loans/deferment-forbearance.