U.S. Markets closed

5 Ways to Avoid Student Loans

Maurie Backman, The Motley Fool

Avoiding student loans means graduating college with a clean financial slate. Here’s how to pull it off.
Image source: Getty Images.

Pencil and calculator resting on student loan application

Racking up student debt in the course of obtaining a degree has pretty much become a rite of passage. Unfortunately, graduating with student loans often means racking up loads of interest and struggling to keep up with those payments after the fact. If you’d rather not close out your college career in the hole, here are a few steps you can take to avoid taking out loans in the first place.

1. Work (a lot) during your studies

The more money you’re able to earn to pay your educational bills directly, the less of a need you’ll have to borrow for college. And you can earn money by working while taking classes. Many universities offer work-study programs that hook you up with jobs on or adjacent to campus, which means you can be gainfully employed even if you don’t have access to a car. Finding a job outside your college campus is also an option. And remember, unless you’re planning to take summer classes, you get a three-month break every year, during which time you can try finding work in your hometown (or wherever you’ll be living at that point).

2. Take time off between high school and college to work

Though work-study programs are a valuable resource for students looking to earn money, they often pay minimum wage, or something close. If you really want to avoid student loans, a better bet may be to take a year or two off between high school and college, get a full-time job with a decent salary, and save your earnings from it. If, for instance, you’re able to bank $2,000 a month for two years for a total of $48,000, you’ll have enough money to cover four years of tuition at the average in-state public college, with plenty left over for books, supplies, and transportation.

3. Seek out scholarships

Scholarships are basically free money for college, but scoring them isn’t so easy. There’s a lot of competition out there, so you’ll really need to be resourceful and creative when applying. That said, if you have a specific talent, whether it’s playing an instrument or excelling at a sport, you can focus your search on scholarships that target the area you’re skilled in. You can also see if any social, volunteer, or religious groups you’re affiliated with have scholarships to give out.

4. Accelerate your studies

Generally, once you’re enrolled as a full-time college student, you’ll have the option to take as many classes as you can cram into a single semester as you wish. If you can handle the added workload, it pays to go that route. If you load up on coursework, you might manage to graduate several semesters early, thereby keeping your costs down and potentially avoiding the need to take out a loan .

5. Start out at community college

For the 2018-2019 academic year, the average cost of community college tuition was $3,660. For a four-year, in-state public college, it was $10,230, and for a four-year, out-of-state college, it was $26,290. If you're looking to avoid student loans, a good way to do so is to spend your first two years of studies at community college. Unless you're in a specialized program, you'll likely spend that time mostly taking core or prerequisite courses anyway, which tend to transfer easily from one college to the next. As such, you might as well knock them out on the cheap.

Graduating college without student loans means not having to spend years paying off debt. Even if you don’t manage to entirely avoid loans in pursuit of your studies, you can try your best to keep them to a minimum. The lower your loan balance when you graduate, the more manageable those debt payments will be.

The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule. If we wouldn’t recommend an offer to a close family member, we wouldn’t recommend it on The Ascent either. Our number one goal is helping people find the best offers to improve their finances. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.