How To Avoid Student Loans: 7 Key Ways

If there were ways you could minimize or learn how to avoid student loans altogether, would that interest you? If your answer is a resounding yes, keep reading.

College is a big next step for many high school graduates. The same applies to people pursuing graduate degrees or changing careers.

However, the average total cost of a four-year college education comes in at around $122,000 and much higher if you factor in private colleges. And let's not get into the average cost of a graduate degree that could run you $30,000 a year or more depending on what you study.

As a result of this high cost, most people have to rely on some type of debt vehicle to fund their college education. The most prominent being student loans.

Finding the money to attend school can be a stressful experience. That being said, here are some key tips for how to avoid student loans.

1. Start saving early to pay for college

When it comes to saving for college every dollar you are able to save will reduce the amount you owe when you start getting your tuition bills.

If you are able to get a part-time job focus on employers that have some sort of college savings benefit that can offset the amount of money you need to save.

If your parents are helping to pay for college, have a conversation with them to talk about putting money aside before-hand. You can also discuss the various savings options that provide additional benefits for college savings, like a 529b. 

It's a good idea to have this conversation as early as possible. This way you can determine how much of your college costs your parents can help pay and how much you'll be paying for on your own.

Also, track your savings goal. Create a designated account and build your college savings into your budget so you can create a plan for how much you need to save each paycheck you earn.

Saving for college is all about taking advantage of the time you have to save as much as you can before your first college bill is due.

2. Compare the cost of your college degree at various colleges

Where you choose to go to college can mean a difference of tens of thousands of dollars depending on the college you select.

Some schools offer benefits for in-county students. You can also receive grants from the state if you decide to attend an in-state school.

To determine your potential savings, compare community college costs to 4-year college costs. Also, compare state versus private college costs and the costs of attending college in-state vs out of state. Doing these comparisons can potentially save you a large amount of money on your college education.

As you compare costs, also look at college rankings and reviews to help you make the best decision that works for you.

Sometimes your heart might be set on a college because of its reputation or location. But there are many excellent options for colleges that will give you an equally good education.

It’s all about focusing on what makes the most financial sense.

3. Research scholarships, grants, assistantships, and even crowdfunding to pay for college

Scholarships and grants are a great way to pay for college. They are essentially free money (based upon specific criteria). It’s definitely worthwhile to spend some time in advance of when college starts to research different scholarships and grants for your program and apply to as many as possible.

While you might not qualify for an assistantship in your first year of college, it's possible to get one as you gain more college experience and advance your education. This can also help knock a chunk off your college expenses.

To make sure you aren't leaving any money on the table, you can even consider crowdfunding sites to crowdfund everything from tuition to books.

Be sure to keep your grades up before and during college to keep your scholarships

Many scholarships target students who do well academically. If you want to qualify any of these scholarships, you'll need to work to either get your GPA to the required cut-off or work to maintain your GPA if you are above the cut-off.

Most scholarships require at least a 3.0, while some require you to maintain a 3.5 while you are in college. Make sure you are aware of the requirements, so you can keep your scholarship.

Maintaining this GPA can be much harder than it would have been in high school or even undergrad. That's why it's best to seek out academic support if you need to.

You can start researching scholarships on

4. Research your student loan options

Once you know how much college is going to cost, you have to decide if you take on loans and what type of loans you take on.

Ideally, you want to try not to take on more than what you’ll earn your first year out of college. Your monthly payment for a loan after college should be no more than 10% of your monthly income.

This way you know for sure that you'll be able to pay back your loans based on your future income and within a reasonable timeframe.

Some key factors to keep in mind when reviewing student loan options:

  • The type of loan (e.g. federal or private)
  • The repayment options (including rules, restrictions, and penalties)
  • The interest rate on the debt
  • The type of interest rate being offered (e.g. fixed vs. variable) and,
  • Exactly what your monthly payments will be on the loan before you sign the dotted line.
  • You’ll also need to determine if the loan type you qualify for requires a co-signer and who that person would be.

5. Research the average salaries for people in your field of study

The whole point of getting a college education, outside of the knowledge you gain and expanding your skillset, is to be able to earn a decent income.

The goal is that this income will allow you to live a good quality of life. It will also allow you to pay back your student loans within a reasonable time after you start your career.

If your college education per year costs more than the average annual salary in your field of study, consider cheaper colleges to attend. Alternatively, you can research similar fields or industries that pay more on average and change your course of study.

6. Avoid living on campus

One of the major perks of going off to college or grad school is being able to live on your own. But if you're wondering how to avoid student loans, not living in your college dorms is a great way to do it.

Even if you do not want to live at home, finding an off-campus apartment can be a much cheaper alternative to living on campus. In the close vicinity of college campuses, you can typically find rent that's much cheaper, as long as you don’t live in a major city.

Of course, you will have to spend money on food, but you can keep your food budget small as long as you are meal planning and not eating out all the time.

7. Take advantage of work-study

Work-study is a great way to avoid student loans. It is very possible to maintain good grades and still work a few shifts per week.

To really benefit from this, pick a low-maintenance job. Working in a library or administrative environment gives you the opportunity to work on your assignments while you are not busy helping other students.

In closing

Taking these steps will ensure you financially prepared for college and have explored the best ways on how to avoid student loans. This in turn will help you minimize the student loan debt you take on. Your college experience will also be much more enjoyable if you iron out how you will pay for it before you start.

If you do take on student loans, make sure you understand how your loans work in order to create a repayment plan.

Finally, if you have a job while in school, you can start playing your loans back early or make interest payments to gradually reduce your overall long-term debt obligation.


Scroll to Top