How to Avoid Graduating from College with Debt

How to Avoid Graduating from College with Debt

Graduating from college with a ton of debt can be super stressful. Student loans are no joke — you gotta pay those suckers back eventually. And the interest rates are crazy high! But going to college is so important these days, pretty much required to get any decent job. So what’s a broke college student to do?

Well, the good news is there are lots of ways to avoid drowning in debt by the time you get that diploma. This article will give you some solid tips and strategies to graduate with little to no debt. Let’s do this!

Choose an Affordable School

First things first, be smart about which college you attend. Just because a school is well-known or prestigious doesn’t mean it’s worth going into massive debt. Do your research and run the numbers on the total cost — tuition, room and board, fees, etc. Consider attending a public university in your home state, as in-state tuition is much cheaper than private or out-of-state schools. Community college for the first two years can also save a ton of money.

Apply for Scholarships Like Crazy

Scholarships and grants are free money that doesn’t have to be paid back — hallelujah! Spend time searching and applying for any and all scholarships you can, through your school and external organizations. Ask the financial aid office for help finding options. Start searching early, even in high school. Write killer essays and get glowing recommendation letters. The more scholarships you get, the less loans you’ll need.

Work Part-Time During School

Having a part-time job during college can help cover some costs and minimize loans. Look for jobs on campus first, as they tend to be more flexible with students’ schedules. Waiting tables at a restaurant, working at the gym or library, tutoring younger students, etc. are all options. Just be careful not to overload your schedule to the point that it hurts your grades.

Live Frugally

Finding ways to save money on living expenses while in college can make a dent in the amount you need to borrow. Get roommates, buy used textbooks, limit eating out, and look for free activities on campus. Split costs with friends when you can. Stick to a reasonable budget for personal expenses. Being frugal now will pay off later.

Start Saving Early

If you start saving up even a small amount each month while you’re still in high school, those funds can help pay for college. Ask your parents about setting up a dedicated college savings account. Look into opening your own savings account as soon as you turn 18 and have income. Every little bit helps avoid future loans.

Consider Federal Student Loans First

If you do need loans, go for federal student loans before private loans. Federal loans typically have lower interest rates and better protections. The most common are Stafford and Perkins loans. Fill out the FAFSA to qualify. Borrow only what you truly need for tuition and required expenses.

Work During Summer and Holiday Breaks

Use summer and winter breaks to earn extra money that can be put towards tuition or living costs for the coming semester. Look for internships related to your major, if possible, for experience and contacts. Seasonal jobs in retail, restaurants, etc. are always hiring extra help. Consider staying on campus if you can work over the breaks.

Pick a Lucrative Major

Choosing a college major with high earning potential can make it easier to pay off loans after graduating. Majors like engineering, business, computer science, and healthcare often result in well-paying jobs. Do your research on salaries and job growth for different fields. But also study what you’re passionate about!

Start Paying Interest While In School

For unsubsidized federal loans, interest accrues while you’re still in college. Consider making interest-only payments each month. Even small payments can make a dent in the interest and save you money overall. Setup automatic payments from your bank account.

Get Parent PLUS Loans Instead

If your parents have good credit, Parent PLUS loans can be better than private student loans. The interest rates are fixed and lower. Payments can be deferred until after graduation. Have an open discussion with your parents about how much they can reasonably take out.

Go to Community College First

Completing your general ed requirements and pre-requisites at a community college can save a bundle on tuition. Make sure the credits will transfer to your 4-year school. Earn an associate’s degree first if you can. Just be sure to actually complete your bachelor’s degree.

Attend Part-Time

Taking fewer classes and extending your time in college by a semester or two can significantly lower costs. This allows you to work more hours as well. Just be sure you have a plan to finish your degree. Make sure required classes are available during non-peak times.

Get Creative with Housing

Living expenses are a big chunk of college costs. Get creative with cheaper housing options, like living at home with your parents for a year or two. Splitting a house with several roommates near campus can save on rent. Many families rent out rooms or guest houses to college students at discounted rates.

Stick to Your Budget

Create a reasonable budget each semester and stick to it. Factor in tuition, housing, books, food, gas, and personal expenses. Cut costs where you can – walk instead of driving, pack lunches, limit shopping trips. Having a plan keeps spending in check.

Automate Savings

Set up direct deposit with your bank to automatically move a portion of earnings, financial aid refunds, etc. into a savings account. Automating your savings helps ensure you’re regularly setting aside money.

Buy Used Textbooks

Textbooks are crazy expensive. Save big by buying used books online or from students who took the class previously. Many campuses have used textbook exchange programs. Ask professors if older editions are okay. Rentals and e-books also cost less.

Graduate Early

Taking extra classes, cramming in summer courses, and earning credits through testing can help you graduate a semester or two early. This cuts down on tuition and living costs. Meet with your advisor to map out a plan to finish fast.

Get Paid to Learn

Some employers offer tuition reimbursement or assistance as an employee benefit. Starbucks, UPS, Chipotle, Home Depot, and many others offer programs. Inquire about education benefits during job searches and interviews.

Pay Off Interest Monthly

Making monthly payments on your student loans while enrolled, even small payments just to cover accruing interest, saves money in the long run. This prevents interest from being added to the principal. Setup automatic payments.

Use Tax Refunds Wisely

Instead of blowing your tax refund each year, use it to pay down student loans principal. This directly reduces debt. Or save refunds to help pay next semester’s tuition. Put that money to good use.

Get Paid to Drive

Driving for Uber, Lyft or DoorDash are flexible gigs that allow you to earn money in your spare time. This can be a nice side income to cover college costs and avoid extra loans. Just don’t let it hurt your grades!

 

In summary, graduating college without drowning in debt is very achievable with smart planning. Apply for scholarships, work during school, live frugally, budget wisely, explore federal loan options first, and get creative about cutting costs. With discipline and diligence, you can earn your degree without damaging your financial future. Now go grab that diploma!