Skip to content

How to Avoid Student Loan Debt

avoid student loan debtIt is that time of the year. It is student loan season.

As fall semester tuition bills begin hitting mailboxes nationwide, many students and families may be in for sticker shock. The rising costs of higher education have forced more and more families to use student loans as a tool to pay for college. You may have seen a number of commercials, radio ads, and display banners advertising student loans recently. Using student loans has become common practice for many families and the many private student loan lenders have started marketing aggressively.

Keeping up with the rising costs of college is tough. But not everyone needs to take out student loans to pay for college. Student loan debt doesn’t need to be the new normal. There are plenty of financing options available for students and families. You just need to know where to look! So before you sign that promissory note, you should consider these options first!

Apply for Scholarships

The National Center for Education Statistics estimates that $49 billion in grants and scholarship money is awarded each year. Before applying for that student loan, consider spending some time on scholarship applications.

Scholarships are free money. You do not need to pay back scholarship or grant awards. Merit scholarships are the most common type of scholarship awarded. The vast majority of scholarships, $46 billion, are awarded by the the Department of Education and by colleges and universities. When you applied to college did you ask to be considered for merit scholarship aid? If not, get on the phone with your financial aid office to see if you qualify for merit scholarship funding from the college. That little check box could be worth tens of thousands of dollars per year.

In addition to merit scholarships, there are plenty of odd and unique scholarships available on the internet. You should consider applying for some of the more specific scholarship programs. There are scholarships for everything under the sun. There are scholarships for being a single mother, having blonde hair, being tall, being short, and even scholarships for left handed people.

Once you’ve filled out a few scholarship applications it will get easier. You will find that you will be able to copy and paste your applications quite frequently.

storecardSeasonal or Summer Jobs

Working over the summer can be a great way to reduce student loan debt. If you are going into college consider looking for a short term summer job. Many retailers such as IKEA increase their staff for the busy summer months. Not only will a summer job help you pay for college, but it will help you begin your resume for the years to come.

If you are already in school, consider looking for an internship. Certain internships can pay upwards of $30 per hour. Internships are great ways to build up your savings. Not to mention, you will be able to expand your network in the process.

Work Study Programs

Most colleges offer work study programs to students. To qualify for work study, you may need to submit the Free Application for Federal Student Aid (FAFSA). Some work study positions are awarded on the basis of need. That being said, there are plenty of on campus jobs that do not even consider need based aid.

On campus jobs are a great way to pay your way through college. On campus jobs can include positions at the library, in computer labs, or even assistance positions to faculty and staff. In general, on campus jobs are pretty laid back. That library aide position might quickly turn into paid study hall. On campus job wages usually start around $8 per hour. But if you stick with it, you are likely to get a $0.25 bonus per semester or quarter. By your senior year you could be making $13 an hour on campus!

In my opinion, working on campus is a better option than working off campus. On campus managers tend to be a little bit more understanding when it comes to the class/work/life balance.

Pay Interest While in School

If you do have student loans, or are considering using student loans to pay for college, you should know that paying your student loan interest while in college is an option. Unsubsidized federal and private student loans start accumulating interest while you are in school. The accumulated interest will compound if you do not pay your interest each month.

Many student loan lenders offer interest only plans while you are in college. Many lenders even offer a discount if you elect to pay your interest in school. If you can, you should pay your interest as it accrues. Paying your interest while you are in school can save your thousands of dollars in interest over the life of your loan.

Student loans don’t need to be the new normal. Consider applying for scholarships, getting a summer job, and working on campus to avoid student loan debt. The class of 2015 graduated with more student loan debt than ever before, don’t let yourself fall into student loan debt if you don’t have to!

Get Out of Debt

AUTHOR Derek Sall

Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.


  1. Applying for a scholarship is the best thing to do when you want to go to a college without having a student loan debt. My cousin just graduated this March without even spending any money.

    • I believe that almost anybody can avoid student loan by working hard at getting scholarships, but unfortunately very few do. Student loans are not the only way to pay for school, people!!

  2. I paid interest while I was in school because I realized I signed up for whichever loan accumulates interest the moment you get it as opposed to after you graduate. I would also add being a mentor/RA to your list; that saved me $8,000 per year at Michigan State since it covered room and board… a total of $24k since I did it for 3 years!

    • Yeah, being an RA is a great idea! Something I never looked into for some reason…*sigh*.

  3. Scholarships are definitely a great way to cut down on student debt. I wish I would have taken a little more initiative on this while I was in college.

    • I think the same is true for all of us, Tyler. The simple fact is that most of us are young and stupid and just assume we’ll make hundreds of thousands of dollars in our future jobs, and therefore don’t worry about the debt. Sad, but true.

Comments are closed for this article!

Related posts