How to Avoid or Reduce Student Loan Debt

December 8, 2022

Paying for college is a challenge for most. There are numerous ways to go about it, there’s not always one clear path. You’ll most likely need to pool together funds from multiple sources. As Benjamin Franklin famously said, “An ounce of prevention is worth a pound of cure.” This is especially true when it comes to avoiding student loan debt. In other words, putting in smaller amounts of effort to earn and save money now, will have a huge payoff later when it comes to being able to afford college.

So how do you avoid loans when you’re short on rich family members and trust fund cash? Here are some ideas:

Start planning in High School

If you’ve somehow missed the headlines, college is expensive these days. Inflation has hit higher education prices harder than anything else in recent decades. But it’s never too early to start thinking, planning, and budgeting. Here are a few ideas to implement while students are in high school that can potentially save time and thousands of dollars down the road: 

1. Begin Working as a Teenager 

Your teenage years are an ideal time to work and start saving money for your potential higher education opportunities. Also, these years are probably the easiest time to save money because you are living at home with little to no expenses.

Working as a teenager comes with additional side benefits that don’t often get mentioned too, like having a boss to report to at the age of 16 or 17 offers valuable real-world working experience to your resume.

2. Take AP Classes 

Taking Advanced Placement (AP) classes in high school can help you earn college credit alongside your diploma and lead to tuition savings as an undergraduate. AP classes prepare individuals to take tests on college-level knowledge in 38 subjects, including English, social science, math, and various languages. Students who receive passing scores on these tests can earn college credit, which not only saves money but also time.

Rather than paying college tuition prices for a class, learners pay a much smaller exam fee. As a result, AP credits allow students to skip introductory classes once they start college. Additionally, these courses help high schoolers gain admission to competitive colleges. An AP class shows college admissions departments that an applicant has the ability to complete college-level work.

Please note: Not every school offers AP classes. Check with your local school(s) or school district(s).

3. Dual Enrollment Programs 

Did you know you can earn college credit for classes taken during high school? Yep! It’s one of the best ways to save money on tuition (and time attending college). Classes like this are usually issued via public university credits. But depending on where you live, the credits earned can be transferred to state schools. 

Dual enrollment courses are typically FREE! If not, they’re often offered at extremely high discounts compared to regular tuition costs.

A friend of mine who participated in the program explained that by dual enrolling he was able to knock out his first year of college classes—at the expense of the state—and start college as a sophomore. 

Here’s a great example: This is the how dual enrollment works in my home state of Georgia:

Please note: Each state’s offering may differ. But if your state offers a similar program it could save you thousands!

Avoiding Student Loans While in College

There are many things you can do while in college that will drastically help lower the cost of school to either lessen or avoid student loans completely. Here’s a few to ponder:

1. Work your butt off!

Are you detecting a theme here? 😉 When most people picture a “college job” they think of working a boring cash register for $8 an hour, or night shifts at a greasy fast food restaurant. But, with remote working capabilities and modern gig-economy apps these days, there are a TON of creative ways to make decent money while in college. Some are really fun!

For convenience, it’s always worth exploring what on-campus jobs are available. For example, many students work part time in the university cafeteria to pay for some of their living expenses. Plus, you might get a free meal, which could save you about $50 a week. Tuition waivers and stipends are also offered sometimes, mostly at the graduate level with graduate assistant (GA) positions. For example, a GA could work as an assistant in his/her program’s department. In a part-time role, the student would receive a full-tuition waiver along with a $2,000-$5,000 stipend check at the end of the semester!

Summer and winter jobs are also common. These are also excellent times to start up side hustles and work on passion projects that make money.

Additionally, you could potentially work a full-time job during the day and attend classes at night. Most universities are now offering online, hybrid, or directed studies that don’t require students to physically attend class. There are numerous options to create a flexible class schedule allowing you valuable windows of time to earn an income. 

One last option: take a gap year! There’s no shame in working for a year in between high school and college to save up money and avoid going into debt with student loans. Working one full year earlier in life can shave off having to work multiple years later to pay off compounding debt.

2. Employer Tuition Reimbursement

There are a ton of employers these days that offer to pay your tuition – or at least offer assistance so you can avoid student loan debt. Here are a few well-known ones:

Many other companies offer programs that aren’t as well known. It never hurts to ask!!

3. Apply for Scholarships and Grants

This statistic will make you sick. Each year there are over $100 million in unclaimed college scholarships. That’s sobering. This is because students simply don’t know they exist! (It’s also very intimidating to think about, so many people are scared to apply)

But applying for free money for college can absolutely help you avoid costly loans.

Pro tip: It helps to have a specific plan before you dive into applications. The best way to unearth scholarships and grants is to start looking locally. The lowest hanging fruit is where there is less competition. Look for local community foundations, credit unions, doctor offices, law offices, Elks Clubs, Rotary Clubs, and any other local businesses that may offer college funding for high school graduates.

You can also check with your school’s guidance office since local businesses and organizations often email their applications to local high schools and colleges to keep on hand.

No scholarship is too small. Even if you get $2,500 from your local credit union or $1,000 from the Rotary Club, that’s money you don’t have to go into debt for! Don’t forget to apply for scholarships at your choice schools. You could end up with a four-year, full-tuition offer. 

Scholarship Platforms:

Below are a few of the many online platforms that can help you find scholarships to pay for college.

Scholarships.comThe site has a database of scholarships worth more than $19 billion. Once you sign up and create a profile, you can filter and browse through the scholarships available.
Fastweb.comThe site has scholarships worth more than $3.4 billion. Students just need to sign up to browse for available scholarships and grants.
Chegg.comThe site offers a number of scholarships, including thousands that don’t require you to write an essay. If you choose not to sign up, you can still browse according to your location and type of application.

4. Keep applying for scholarships (even while you’re in college)

Try making friends with the financial aid and scholarship office officials at your school. You may be able to get funding to help cover books, housing, and other costs as a sophomore or junior.

Once you start school, ask where the scholarship (or financial aid) office is and make an appointment to meet with a counselor. Colleges and universities have dedicated staff members whose sole job is to ensure your success. Their job is to help you find scholarship money. Don’t take this for granted! There’s never harm in asking.

5. Student Research Positions

To help cover college expenses, students might also be able to work on certain projects as undergraduate researchers. Not only do these types of roles help pay some of the bills, but they also provide real-world experience that can help individuals land jobs after graduation.

Try looking for positions in an area in which you have experience (or are passionate about). Also check with your professors and other teachers for anyone looking for undergraduate assistants. Organizations outside of your school, such as hospitals, research institutions, and community-based organizations often look for students to fill research positions that are backed by grants.

6. Work-Study Programs

Federal work-study programs are mostly offered to students who can exhibit financial need. They are designed to help supply you with an income while you attend undergraduate or graduate courses.

To qualify for federal work-study programs, you must be in pursuit of a postsecondary educational degree or certificate. The hourly wages you’ll be paid are legally required to be higher than the federal minimum wage, and jobs that are compatible with work-study can include your school itself, a federal, state, or local public agency, any private nonprofit organization, or a private, for-profit organization.

Like other federal programs, determining eligibility for a federal work-study program starts with filling out the Free Application for Federal Student Aid.

7. Internships

Internships can be a way to build real-world experience while in school. Most internships offer you some type of course credit and in addition, many come with the added bonus of being paid. Visit your school’s career center for information about available paid internships because they can be a massive win for your financial future.

Pro tip: Don’t discount the possibility of finding a paid internship by networking with family and friends. Put the word out, someone you know might know a place that will pay you to intern.

The Bottom Line: Avoiding Student Loan Debt

Unfortunately, most folks enter college these days with the expectation of borrowing a ton of money then paying it off later when they get a job. But, it can take decades to pay off student loans, begging the question, is college even worth the cost?

Don’t let anyone force you into taking out expensive loans to pay for college. There are plenty of other options to consider (in addition to what’s provided in this blog), and they can all lead to a rewarding career.

Odds are, with the soaring cost of college, you’ll require more than just one tactic to pay for your schooling. Millions of dollars of grant and scholarship money go unclaimed each year. Carefully research the cost of attendance at the school of your choice and put together a plan that allows you to meet those costs as efficiently as possible. Dare I say…start a budget.

Additional Resources

More scholarship websites to help with avoiding student loan debt:

Books to check out that might help you in avoiding student loan debt:

**Photo by Scott Webb on Unsplash

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