7 Ingenious Ways to Avoid Student Loan Debt

As most past, current, and future students know, student loan debt can be very burdensome, especially as the cost of schooling increases and puts even more pressure on loan-takers. This can lead to hard life decisions, such as waiting to buy a home or car, postponing a wedding, or having to move back in with parents as a grown adult. Luckily, however, there are things you can do to minimize your debt and be better off financially for your future. Let’s take a look at seven ingenious ways to avoid student debt. 

1. Use the Free Application for Federal Student Aid (FAFSA), Grants, and Scholarships

First and foremost, regardless of your financial situation, fill out the Free Application for Federal Student Aid (FAFSA), as you may be eligible for financial aid through it. The federal government gives billions of dollars to the program, which helps eligible students with tuition assistance. The government also offers so-called Pell grants to students who are extremely low-income and do not already have a degree.  

Secondly, while this seems obvious, many students fail to look for grants. Sure, some are widely known and utilized often, but did you know there are countless other grants that you might be able to receive? For example, many are available for minorities, veterans, or low-income individuals, so be sure to look for ones that are relevant to you – you might be surprised at how many you can find. 

Thirdly, try to get scholarships. We’ve all heard of athletic scholarships, but most schools offer academic ones, too. If you are still in high school, study diligently and get excellent grades, as this could gain you a very nice academic scholarship. You may also be eligible for academic scholarships based on your standardized test scores depending on where you live (e.g., SAT, ACT, etc.). Some of these are “full rides” and will fully cover your tuition, whereas others might be partial scholarships and cover a certain percentage or amount. Either way, these can greatly reduce or eliminate your student loan debt. 

Grants and scholarships, like classic financial aid, normally do not have to be repaid and therefore are excellent ways to avoid student loan debt. 

2. Choose a Less Expensive School or a “No Loans” School 

Of course, community colleges are oftentimes much cheaper than higher education universities and spending a couple of years there to get some prerequisites out of the way can be a great place to start your academic career. Aside from that, staying in-state and paying in-state tuition is a critical step you can take to avoiding student debt. Out-of-state can sometimes cost you tens – yes, tens – of thousands of dollars more than an in-state school. Many higher education institutions charge significantly lower in-state tuition rates that are attractive and make in-state residents inclined to attend. 

Some areas also offer programs that offer in-state or deeply discounted tuition for out-of-state students. For example, the Western Undergraduate Exchange (WUE) is a program facilitated through 16 states and over 160 schools participate in it. Students who partake in this program pay no more than 150% of in-state tuition at the participating schools, which is a great deal compared to the normal 300%+ rate out-of-state students often pay. 

While most people are aware that in-state tuition is much cheaper than out-of-state tuition, many do not know about specific “no loans” schools. “No loans” schools encourage low- and moderate- income students to apply and normally cover the financial needs of each specific student. (Note that it does not offer free tuition – just what the students cannot cover.) Most of these schools are high-profile and normally very expensive (e.g., Harvard University, Princeton University), so many students steer clear of them due to the price. The “no loans” policies, however, encourage students with insufficient funds to attend these schools. 

3. Know Your University’s Payment Policies

It is no surprise to anyone that college is expensive, and universities are well-aware of it. Many of them offer payment plans that can be utilized to ease the financial burden and allow students to pay for school in monthly installments without any interest accruing. This eliminates long-term debt accrued from loans and gives students more flexibility with their money monthly instead of having to pay a lump sum for their loans. The financial aid and bursar offices at universities will have information regarding these policies, if available. 

4. Budget and Make Wise Financial Decisions

Of course, tuition is not the only expense students need to think about. The cost of living is also vital, which includes housing, food, and other basic necessities. Before starting an academic venture, it is critical to plan out a budget to see just how much money in loans you may need to borrow (if any) and minimize it as much as possible through cutting back in other areas. Be careful with credit cards, as it can be easy to overspend on them and then owe back interest on those later on, too. While cutting back may mean missing out on more high-cost experiences, it will help financially for the future. 

Although it sounds extremely fun to live on your own, travel a lot, and spend money on lavish entertainment, these may not be the best ideas if you are trying to avoid student loan debt. Many students are itching to get out of their parents’ house, which is understandable, but living at home for a couple more years may save thousands of dollars that can be put towards tuition instead (therefore, minimizing loans). Getting a roommate (or two or three) is a great way to get out of parents’ houses and gain a little independence while being able to split the rent and save money. 

Transportation can also get pricey, so living closer to school (or on campus) and only traveling home (or elsewhere) once or twice a year can save some cash, too. Dining out should also be reduced, as meals outside the home can really add up and turn out to be a massive detriment to your bank account. Also, look for used textbooks and class materials or share with classmates, as books and similar costs can also be extremely expensive. 

You should also prepare to repay. If you do need to take out student loans, be sure to have a plan on how you are going to pay them back. Hopefully your debt will be minimal after initial budgeting and planning, but if you are going to owe, have a plan laid out for how much and when you will pay. 

5. Get a Job

Another quite obvious way to avoid student loan debt is to get a job. Getting a job and a regular paycheck can help you cover your tuition and living expenses. Regardless if you opt for part-time or full-time work, any income can help you. Perhaps better yet, certain universities offer work-study programs that allow students to work and get paid while also covering part or all of tuition. Most schools have programs like this, so be sure to look into it. 

6. Start Saving Early 

The more you save before college, the less your financial burden will be after it (unless you have completely avoided debt). Just in general, interest rates can be excessive and very detrimental to your bank account and, unfortunately, many student loans come with steep ones. Even though borrowing money seems easy and like a good idea at the time, if you save money early instead of borrowing it, you may be helping yourself in the long run. 

7. Graduate on Time (or Early) 

College can come with a lot of fun and great experiences, but being diligent with coursework and finishing school on time or early can benefit you greatly financially. Switching schools or majors can add additional time, so if you are wanting to save money, make it a priority to choose your major wisely and follow through with it. Each additional year of school just adds to your bills, so if you can graduate early, it saves money because less will be spent on commuting and/or room and board. Be smart about planning your prerequisites, too, and getting them out of the way as soon as possible. Universities normally have guidance counselors who can help you come up with a solid coursework plan. 

Overall, there are many things you can do to avoid student loan debt. Doing your research and finding grants/scholarships/aid that apply to you can be extremely helpful, as can making good budgeting decisions and cutting back on unnecessary expenses. 

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