5 Ways to Avoid Student Loans

Everyone is aware that student loan debt has become a massive problem here in America. Even though I am not yet in college I am astounded by the enormous debt that some people have when they graduate. The Consumer Financial Protection Bureau reported on March 21, 2012 that “Our initial findings on the size of the private student loan market are sobering. When we add in the outstanding debt in the federal student loan program, it appears that outstanding student loan debt hit the trillion dollar mark several months ago – much larger than estimates from other recent reports.”

Student Debt Cartoon Big

A trillion dollars? Ugh. I may need to go breathe into a paper bag for a minute. With college only a few years off for me, I am committed to graduating from college without any debt at all. I know that this will be difficult, but am convinced that it is not impossible after doing a little research and thinking things through. Here are five strategies to avoid student loan debt:

1) Start Saving Your Money Right Now

If you are a teenager, saving your money now will make a difference for you when you get started in college. Even if you only saved $25 a month from the time that you turned fifteen, you would have $1,200.00 by your nineteenth birthday. It isn’t that much, but it is certainly better than nothing. If you saved $100 a month you would have $4,800. Not bad…

2) Work Summers, School Breaks and During School

If you are really diligent you can save over $2,000 in a typical summer (assuming you live at home and are working a minimum wage job). You can continue to earn throughout the school year so that you have money for living expenses. Just recently I discovered students can take out loans for living expenses – and some are having themselves a time buying expensive clothes, going out to dinner at fancy restaurants and other such foolishness. Whaaaaaa?!? Of course, when they graduate and don’t find a job that pays $100,000 a year like they thought life isn’t going to be quite so much fun. Especially when they discover that they can’t buy their first home because their student loan payment is higher than the average monthly mortgage payment…

3) Apply for Scholarships

You already know this so I’m just gonna say that although it is a pain in the neck to fill out all of those applications it doesn’t hurt to try and can make a big difference for you financially. The sooner you start, the better.

4) Go to Community College

You can save a ton of money by attending your local Community College for the first two years. And your savings becomes much more significant if you do this AND continue to live at home. This is what I am planning to do. Getting a cute apartment with some girlfriends sounds really awesome, but paying off student loan debt for the rest of my life just doesn’t appeal, know what I mean?

5) Attend a School Committed to Helping its Students Graduate Debt Free

Recently, I heard about Davidson College which is located north of Charlotte, North Carolina. Their Board has done something extraordinary by creating The Davidson Trust. This small school has made it possible for students from all economic backgrounds to graduate without any debt. Other schools have also followed Davidson’s example so be sure to carefully research schools that you thought might be too expensive for you to even consider.

These are some of the strategies that I will use when it’s my turn to start college life. It is so exciting to think that if I work hard and plan carefully I can look forward to college without the ‘gift’ of student loan debt. It is certainly a gift that ‘keeps on giving’ and I want nothing to do with it…

How do you plan to avoid student loan debt?

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About Eva

Eva Baker is a high school student passionate about preparing for her financial future and helping other teenagers prepare as well. When she isn't rock climbing at the gym or pinning ideas for her non-existent wedding, she documents her financial journey over at TeensGotCents.com. Find her on Facebook and Pinterest!

  • http://www.moneylifeandmore.com/ Lance@MoneyLife&More

    Applying for scholarships was huge for me! I wish I had applied for more! The work you have to do to get the money if you target the right scholarships is negligible.

    • teensgotcents2

      This is an area that I need to investigate more – planning to do that later this month. I have read that so much scholarship money isn’t awarded because no one applies for it!

  • http://www.facebook.com/mary.losiak Mary Losiak

    You’re so right about working during summer! It really paid off for me because I had some good references for the jobs that I applied for once I got to school.

    • teensgotcents2

      That’s a great point Mary! You can use good references for acceptance into college as well as for scholarship applications.

  • http://fatguyskinnywallet.com/ Khaleef Crumbley

    I wish I would have had this article around when I was in high school. I choose to play sports instead of working, and I didn’t know what scholarships were out there for me.

    • teensgotcents2

      I have a few friends who got scholarships for sports. Like I said to Lance, I still have a lot of research to do to see what kinds of scholarships I should apply for, and the sooner you start the better.

  • Jen

    What an informative article! I can’t wait for my 13-year old to read it! My husband and I were just talking about student loan debt the other night and in disbelief over the trillion dollar mark! Thanks for a great article with a young, sensible perspective.

  • Lise

    Great! We have 2 in college and made a commitment that we would NOT take out any loans. I can’t think of anything worse for college students than to graduate with all that debt!

    • http://YoungFinances.com/ LaTisha Styles

      How about graduating with debt and no job? Sadly, it’s happening too often nowadays.

  • Nancy

    Appreciate your timely advice since mine will be starting the journey next year. Not looking forward to going through the scholarship maze but am willing to try! I have a dear friend that works at Davidson college, would love to see other colleges adopt their philosophy.

  • http://www.mypersonalfinancejourney.com/ Jacob @ MPFJ

    Nice post! I was lucky enough to get a full ride scholarship when I went to undergrad a few years ago. It really helps to be debt free when you graduate, since it allows you to start saving a lot more once you get your first job.

    One useful thing that I did was contact the scholarship office at the university I attended and got a listing of “lesser-known” scholarships and applied for all of those.

    • http://YoungFinances.com/ LaTisha Styles

      Hmm. That would have been nice to know. I applied for the ones online but I didn’t know about the smaller local scholarships until it was too late!

  • Marti

    Great post Eva! I would have never guessed that student loan debt was such an astronomical number. Thanks for the the tips on how to avoid this with my 16 year old. He’s pretty good at not spending money but this article reinforced the need to save!

  • http://twitter.com/GooseBiz Robert Gustavis

    If you have to take loans, start paying them while you’re still in college if you can. Great article!

    • http://YoungFinances.com/ LaTisha Styles

      True, that is a good way to get a head start.

  • Nick @ ayoungpro.com

    I love all of your suggestions! Student loans are one of the great problems facing America today.

    • http://YoungFinances.com/ LaTisha Styles

      Thanks! I think if we can start to educate students about what a college degree really is worth, it would cut down on getting a college degree just for its sake.

  • Megan

    This is a great list – and will likely help a lot of people – but there’s another option that I think get’s undersold. (It isn’t for everyone, no question there.) Don’t go to university – or don’t go right away. If you want to be in healthcare, law, or engineering (and the other careers where lives literally depend on you!) the of course, post-secondary is the way to go. But if you’re interested in anything else – or are really just considering a college education because “that’s what you do to get a good job” I’d beg you to at least consider your options. Spending 4 years to get a $40,000+ receipt that puts you on a level with every other job applicant isn’t a great deal to my way of thinking. I think it’s a good idea for people to think about what they want to actually do before they commit to a college or university course – there are often many paths to the same kind of career.

    I know I went to university without even considering the option that I might… not go to university. I was awful at it, and ended up with work totally unrelated to what I studied. But, of course – I still got to pay through the teeth for it!

    • http://YoungFinances.com/ LaTisha Styles

      This is so true! When I went back to school I decided to ‘work backwards’, or see what jobs I could get with the degree I chose. I knew I would do well with finance after taking the intro class and I knew that I needed a degree to work in that field.

      But when I went to school the first time I just chose Spanish because I liked it with no thought to what career the degree would take me into. I would definitely say to figure out what you want to do before going to school especially if you are taking out loans.