10 Best Ways to Avoid Student Loans | Student Loans

The average student loan debt in America is currently $31,172 per person and takes 10-30 years to pay it off. I'm not sure how an average on years is that wide but it sounds miserable regardless.

​I was one of those people but with about triple the loans.  I ended up having over $80,000 that took me 5 years to pay off through loan forgiveness and a strict budget.

If this doesn't sound like something you want to be apart of you are in the right place because here are the best ways to avoid having student loan debt!

 1. Do Well In High School
This is pretty obvious and may not be all that helpful if you are already in college or graduated. But, many schools will give scholarships based on your grades and extracurricular activities while in high school. Do the best you can in school and you may end up getting a scholarship for academics,  music, art, theater, or sports. 

This means you'll also want to prepare for the SAT or ACT to you get the highest score possible. Heck maybe even take it a few times if that helps. Don't be like me, thinking I was too good to study and only taking it once.

This may be my biggest regret when it comes to student loans. I could have studied harder in school and easily gotten some scholarship money. I even had the option of getting a full ride to any in-state university if I excelled on a state test. I  was a few point off but didn't study or never retook it. Don't be like me, try hard in school!

2. Earn College Credit In Cheaper Ways
There are three ways to earn college credit without having to pay the hefty credit fees associated with a big university.

1. Take Advanced Placement (AP) classes in High School
   Depending on the school you can take AP classes in subjects like chemistry, biology, foreign languages, computer science, environmental science, calculus, history, economics, psychology, English literature, art, music and more. If your high school offers AP courses, take as many as you qualify for and be sure to take the AP exam offered at the end of the year. 
   
   Although the rules and requirements change between colleges, many offer students course credit if you get an AP test score of 4 or higher. This means you may get to skip out on things like introductory math, science, language, or writing courses.
   
   Before you do all that make sure the credit will count though by checking here. 
   
   
2. Dual Enrollment
   Some high schools allow you to take a dual enrollment class which gives you high school and college credit. I was able to do this and skipped taking an introductory English and Math class while in college. 
   
   
3. Take College-Level Examination Program (CLEP) exams
   This is basically an AP/IB exam for college students. You are able to take a test for about $85 to prove that you understand and know the course material whether you've taken the class or not. Look into what your college does but in many cases, colleges charge a flat tuition amount for up to 5 or 6 classes. If you take less than that, you’ll still pay the same amount.  Check with your advisor that the credits will transfer before signing up for any tests.

3. Earn Credit At Community College
The appeal of going to a big university, or where your friends are going, is real. But you can spend one or two years at community college, earn credits, save money, and then transfer to the big school.  This will allow you to figure out what you want to do after college at a way cheaper price point. 

About 20% of my total loan debt came from my undergraduate degree and the rest came from a car loan and graduate degree. Honestly, if I could go back I think I would have still gone to the big university and applied for different scholarships or done better in high school. Community college is a good option and should be considered. 

4. Fill Out FAFSA
The  Free Application for Federal Student Aid (FAFSA) is just that – free. Everyone should fill out a FAFSA, even if you think your family’s income is too high for the need-based financial aid because there really is no downside. You can even apply before you make a decision on schools since that might help you choose. 
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Form Your Future, which is sponsored by the National College Access Network (NCAN), said more than $24 billion in financial aid goes unclaimed every year with a large chunk being from FAFSA.  Know the deadlines because each state is different. Just fill it out every year and see what happens.

A few days or weeks after you submit your FAFSA, you'll get a student aid report (SAR). Your SAR will tell you whether you qualify for a federal grant, like the Pell Grant, or if you qualify for a work-study or another federal aid program. It doesn’t tell you the actual amount of aid you qualify for since the school determines that. Since the funding each school gets varies the sooner you file your FAFSA the faster the schools can tell you which aid you qualify for. 

Grants found through FAFSA are often based on financial need and do not have to be paid back. 

5. Find Free Money
Getting money that doesn't need to be repaid or accrue interest is the dream for any college student. Scholarships and awards can be awarded for nearly anything, and there are billions of dollars out there waiting for students to apply for it. Some options will have specific requirements while others are open to every student.

Do you like horses? Video games? Volunteering? Yup, there are scholarships for that.

There is a lot of competition out there, so you’ll really need to be resourceful and creative when applying. Focus your search on scholarships to areas you’re skilled in. Or,  you can also see if any social, volunteer, or religious groups you’re associated with have scholarships to give out.

Here are some ideas of how to get that "free" money:

Scholarships

• You can start with a simple Google search,  visit your financial aid officer or your high school guidance counselor. Organizations like nonprofit volunteer clubs, religious organizations, and civic groups offer scholarships to outstanding students or students who meet their criteria. Check with your bank or credit union, your parents’ employers, and organizations dedicated to the field or industry you’re interested in studying. You don't need to have a perfect GPA, test scores or be low income to qualify for scholarships. 
  
  

Military-based funding

• Tuition assistance: Active military members can use $4,500 per year and is a great way to start or complete a degree that doesn't take away from your GI Bill.
•  GI Bill: This is given to military members who serve over 90 consecutive days and provides up to 36 months of         education benefits. This benefit can also be passed down to dependents.

Crowdfunding

• If you have family members or friends that want to help support your education, you can start a campaign to raise donations. You can do that with GoFundMe and/or IndieGoGo. You'll want to see if the platform takes a percentage out of the total donations raised. Donations are typically considered a “gift” and shouldn't not taxable but check about any tax obligations.

6. Work For An Employer That Covers Tuition
They estimate that 60% of employers offer some sort of tuition reimbursement and Starbucks is a great example of this.  It’s also becoming more and more common for companies to pay back some or all of their employees’ student loans. They may also pay for you to go back and get your Master's. 

Your college might have jobs on campus where your earnings go toward paying for tuition and other fees.  Other schools may have official work-study programs which may or may not be tied to a student’s field of study.  You can also check out the federal work-study program that helps students earn money to pay for school. 

While these are great option look to make sure it is worth your time. If you make minimum wage working for the school through one of these programs but can earn more elsewhere, do that.  You can also start a side hustle and here's a bunch of great ideas. 

7. 529 College Savings Plan
529 plans are often run by a qualified state or university. They offer tax advantages, such as no federal tax on earnings, and in some instances, state income tax deductions. The contribution limit for a 529 plan depends on the plan you choose, but it’s usually more than the $2,000 yearly limit for a Coverdell ESA.

Money you contribute to a 529 plan is meant to be used to cover the cost of tuition and other school-related expenses, such as supplies and equipment, books, and computer software

8. Look Into Forgiveness Programs
If you have federal student loans you may qualify for a loan forgiveness program. That means you'll no longer have to pay your loans after a certain amount of time if you meet the requirements. Not every loan is eligible for forgiveness and may take years before you qualify.

Some jobs or careers offer student loan repayment or forgiveness so keep your eyes open for that. For more information about this click here. 

9. Accelerate Your Studies
I saved the worst idea for last. If you are enjoying college the last thing you want to do is graduate early. But, if you can stand the extra workload graduating as soon as possible is smart. You'll not only be taking out less in loans but start earning full time money faster.

You may need approval if you go crazy with the amount of credits you take but you should be able to cram in as many classes as you can handle. 

Disclaimer About Private Loans
This isn't a way to avoid student loans like the title states but is a good way to minimize it's impact.

The federal loan program allows you to borrow up to $5,500 from the federal direct subsidized loan program as an undergraduate and up to $20,500 from the unsubsidized direct loan program minus any subsidized amounts you receive for the same period, depending on your grade level and dependency status. For a Direct PLUS Loan, you can receive the maximum amount of the cost of college attendance, minus any other financial aid you receive. This amount is determined by the school.

Although you want to keep your borrowing low when you take out federal loans, their protection programs offers you the ability to defer payments if you lose your job or go back to school. They also have a variety of income-based repayment plans, making them preferable to private loans.

Private student loans don’t have such limits, which makes it easy to take out more than what you need. They also tend to have higher interest rates than federal loans and don’t always offer flexible repayment plans or the ability to defer your loans if you’re out of work or go back to school.

If you need to take them out it isn't the end of the world. I did for a small amount but it was also the first one I paid off since I wasn't able to defer it and had my dad as a co-signer. ​​

​Summary

The general gist is to try and be smart before going to college by doing the best you can in high school. Get the best grade point average (GPA) and SAT/ACT scores you can. Try and get as many college credits as cheap as you can. While in college look for ways to earn "free" money and graduate as fast as possible. If you have the time start a side hustle. After college look for employers or programs to help with loan forgiveness. 

The moment I paid off my students loan was very anti-climatic as the lender didn't see it as quite the celebration I did but it was a great moment for me! ​