A dust reducing sanding system for collecting dust created during the sanding of gypsum board includes a shroud including a top wall and a peripheral wall coupled to the top wall to define an interior space. A distal edge of the peripheral wall opposite the top wall defines an open end to allow the dust to enter the interior space. A handle is mounted to the shroud and is graspable to facilitate manipulation of the shroud. A collection pipe is coupled to the peripheral wall of the shroud and is in fluid communication with the interior space. The collection pipe is engaged by a vacuum to allow the dust to be vacuumed out of the shroud. A base plate having a plurality of apertures extending therethrough is positioned over the open end of the shroud. An exterior surface of the base plate is abrasive.