- Ways to avoid student loans include tuition reimbursement and completing low-cost transferrable credits.
- More state schools and community colleges are either reducing tuition or making college free for those who qualify.
- Applying for scholarships is a great way to reduce the total amount you’ll need to borrow in student loans.
Paying for higher education in the United States has grown increasingly difficult over time. Between 2010 and 2021, the cost of college tuition has risen by a whopping 140.6%. So it’s no wonder that many people are looking for ways to pay off their student loan debt as early as possible.
More and more potential college students are trying to figure out how to save money on college and avoid becoming part of the 85% of college graduates who regret taking out student loans. Depending on your financial situation and prospective major, it may be difficult to avoid taking out student loans altogether. However, it doesn’t mean that you need to take out large amounts or end up in debt that will crush you later.
Before we go into how you can avoid taking out college loans and getting into massive debt, let’s explore the reasons WHY you should avoid taking out student loans.
What Are 4 Reasons Why You Should Avoid Taking Out Student Loans?
The four main reasons to avoid student loans are the high-interest rates, lack of forgiveness options, and long repayment periods. Student loan interest rates can be significantly higher than other kinds of debt, making it much more expensive to pay back. Furthermore, there are few options for loan forgiveness, meaning you can end up paying back much more than you originally borrowed. Additionally, student loan repayments require much longer terms (up to 20 years) which means a huge amount of total interest is paid over the life of the loan. Finally, if you take out student loans and refuse to pay them back, you could face serious financial consequences that could potentially affect you throughout the rest of your life.
Refusing To Pay Back Student Loans
Most student loans must be paid back, and you can face serious consequences if you refuse to do so. In many cases, the government can garnish wages or seize tax refunds if the loan is not repaid. It is also possible that your credit score may be damaged severely if you default on a student loan. The best course of action is to contact your lender and try to make arrangements for repayment, such as creating a payment plan or deferment. If necessary, consider consolidation to lower monthly payments before taking any extreme measures.
Student Loans May Only Go Away Under Specific Circumstances
Student loans generally do not go away; borrowers almost always need to repay them in full. In some cases, such as for students who die or students with a permanent disability, student loan debt may be discharged. Additionally, some types of student loans are forgiven after a certain number of years of consistent payments have been made — most notably from federal public service and income-driven repayment plans. In addition, there may be some limited options for partial or complete forgiveness through specific state programs, or depending on the type of loan and other factors.
6 Ways To Avoid Student Loans
If you’re wondering how to lower college tuition costs, there are many options available. This advice applies to anyone considering enrolling in an education program – whether you’re right out of high school or going back to college after 25. If you’re already enrolled, check out our tips on how you can save money on tuition while you’re already in college. Below are six methods for you to avoid student loans.
1. Tuition Reimbursement
Also known as tuition assistance, tuition reimbursement programs are something many employers offer these days. Depending on the company or the position you hold within that company, your employer may pay for a pre-determined amount of college coursework. These programs are specifically for employees to advance their knowledge and skills. Usually, they relate to their current or future positions within the company. While many employers offer this benefit, it often goes underutilized. The most common reason is that employees don’t know this benefit exists. This situation is one where you might not be aware it exists until you ask. The benefit of lowering your average cost of tuition is undoubtedly worth it.
2. Taking Courses at a Community College
Community colleges are growing in popularity and for a good reason. They are one of the most straightforward and practical solutions for how to lower college tuition costs. There are many ways you can save money by opting for a community college:
Attend Community College then Transfer to a 4-Year Institution
Depending on your chosen major, the first two years or so of college tends to look the same for most students. You need to pass core classes before moving on to the more in-depth ones. The core courses are almost always cheaper to take at a community college. Combine that with what you save in room and board, dining, and other costs, and you can save a significant amount.
Take Community College Courses in the Evenings
This route is much cheaper than taking classes at a traditional four-year institution. Initially, community colleges intended to help students who couldn’t afford or commit to a full-time college. It’s a great option if you find yourself still working a full-time job or having other responsibilities you need to fit around college courses.
3. Attending a Low-Cost College
If you still have your heart set on a traditional four-year institution, you still have options on how to save money on college. Take a look at a few options below:
Don’t Rule Out Little-Known Schools
Just because you attend a well-known university doesn’t mean you’re necessarily getting a better education. While it’s true that prominent schools probably get more funding, this doesn’t mean that lesser-known schools can’t provide you with just as good an education. Opting for a more rural school, for example, could save you a significant amount of money when compared to attending a well-known school in a busy city.
Focus On In-State, Public Colleges
It’s a guarantee that attending a public university in the state you’re from will cost less. Given that the average cost of tuition for an in-state public university is 72% less than a private college, you could find yourself spending a lot less while still getting a quality education. States have a financial and economic incentive to keep educated students within the state because they know their state will reap the benefits after graduation, so there are always programs to incentivize in-state schools.
4. Search for Scholarship Programs
There is almost an infinite amount of college scholarships that you can apply to in order to offset the cost of tuition. There are several different types of scholarships that you can access to see if you qualify.
- College-Specific Scholarships: these are scholarships offered through individual colleges
- Federal Financial Aid Scholarships: scholarships offered through the federal government
- Private Scholarships: these are privately funded scholarships offered through colleges by donors who are alumni of the school
Both high schools and community colleges often have great resources on campus to help with the search for scholarships. There are also many options online. Searching for school-specific scholarship programs is an excellent route to avoid student loans.
5. Earn Transferable College Credits
Earning low-cost transferable credits is another excellent way to avoid massive student loan debt. Some organizations, like Outlier, edX, and Study.com, offer university-level online courses for a fraction of the cost. These credits* will directly transfer into a 4-year university. Outlier and edX have agreements in place with schools that will allow you to earn credits by completing courses approved by specific universities. Once completed, you can transfer those credits to their institution. You can either opt to take individual courses or follow a specific course plan such as EdX’s Microbachelor or Micromaster’s programs. These micro-degrees are often a perfect alternative to taking traditional classes at a brick-and-mortar school. Equally important, they provide the same level of education but at a significantly lower cost.
Some local schools also have programs that allow students to take classes during high school while also earning college credit at a partnering community college. This option is a great way to get ahead of the game by saving money, even in high school.
*Not all schools will accept credits you earn outside of a partner institution or prior to written approval. Be sure to check with your school to make sure the credits you earn will transfer into your program.
6. Apply for an Apprenticeship
Apprenticeships offer a compelling and practical alternative to avoid the burdensome weight of student loan debt while still gaining valuable skills and knowledge. Unlike traditional education paths, apprenticeships enable individuals to learn through hands-on experience and on-the-job training, immersing themselves directly in their chosen field. As apprentices work alongside seasoned professionals, they not only acquire industry-specific expertise but also receive a stipend or wage, allowing them to earn while they learn. By circumventing the need for costly college degrees, apprenticeships provide a more affordable and debt-free route to success, fostering a skilled workforce that meets the demands of various industries. Embracing apprenticeships as a viable option can empower young individuals to pursue fulfilling careers without the financial strain, opening doors to a brighter and more financially secure future.
Final Thoughts on Avoiding Student Loan Debt
Paying for higher education is a daunting prospect. There are many options for how you can avoid student loans and subsequent debt. Whether you choose to attend a low-cost college, search for scholarships, or take advantage of what your local community college has to offer, you’ll be more likely to lessen student loan debt. While college can be an expensive undertaking, you can get an education without making financial sacrifices. And with that lowered or non-existent debt, you can set yourself up for a brighter financial future!
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