How to Prevent Debt as a Student

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How to Prevent Debt as a Student

Just because student loans have become a norm, it doesn’t mean you have to resign yourself to the same fate. There are many ways you can escape debt as a student, or at least limit your loan before you graduate. As tuition fees rise, so do student loans. An average student who graduated in 2015 carries almost $35,000 in student debt. So, even before you have started your career, you are already under pressure of making monthly loan payments.
Being a parent or a soon-to-be undergrad student, there are many strategies you can employ to avoid the student loan debt. There are two ways you can avoid this loan: get your tuition fees waived or increase your income. Since the former is close to impossible, unless you are on a full scholarship, only the latter is possible. Here are a few ways you can eliminate or at least decrease your student loan.


Obviously, this is a no-brainer! You do need a longer timeframe for this strategy to work, and maybe even the help of your parents. Even if you can’t save up all $35,000, you can still save enough to pay for the on-the-top expenses, such as paying for residence/hostel, meal plans, textbooks, commuting, etc.
All parents expect their children to grow up and attend college and yet only a percentage of these parents save up for their child’s education. Even if your parents haven’t saved up or invested in a savings plans, you can easily spend your high school years working part-time. If a student works at minimum wage on weekends, they can easily save up to $20,000 over the course of 4 years. That’s $20,000 less to pay when you graduate!

Pick a Cheaper College

Whether you like it or not, education is a luxury, at least for those who don’t even have clean water to drink. Living beyond your means will sink you deep into debt, even when it comes to education. Picking a cheaper college doesn’t necessarily mean picking an unsatisfactory college. It means you need to look at costs apart from tuition fees. At some colleges, the living expenses are ridiculously high, especially if they are located in a big city.
To lower your burden of debt, it’s best to start researching the costs associated with the school you are interested in at an early stage. Even if the costs are high, all you need to do is increase your income so you can offset those costs. You can also contact students who are already studying in your school of interest, to get an idea of how much it’s costing them. If your parents are paying for your college, work with them to see if it will fit within their savings and budget.

Plan Out Spending Strategies

So, now that you have successfully saved some money, how do you spend it? Planning a spending strategy year by year is a poor choice. There are many students who diligently save up during their high school years and then blow it all away in their first year of college. On the other hand, splitting it evenly across all four years isn’t the smartest choice either.
Consulting a certified financial planner may be a good idea to find the best spending strategy. It will help you understand how much money to spend, when to spend, how to factor in rising costs and how to take advantage of financial aid offers.

Borrow Wisely

If you are planning to borrow, your first choice should be federal student loans. Private loans have higher interest rates than federal loans and the interest compounds more frequently. Also, federal loans are softer in the sense that there is space for forgiveness, deferment and forbearance, which is highly unlikely for private loans.


A great cost-saving strategy is to enroll in an extremely low-cost option, such as a community college, for the first couple of years and then transfer to a reputable college that comes with a larger price tag. On average, all private and highly-reputed colleges have average tuition fees of $31,000 for a four-year program, as of 2015, while all public colleges have average tuition fees of $9,000 for a four-year program. This means you will be paying roughly $4,500 for the first two years and $15,500 for the last two years if you were to get a transfer.
While this route sounds smart, it does require a tremendous amount of planning. First of all, you have to make sure you are on the right path for fulfilling your requirements to get a transfer. Secondly, this detour may not work because a transfer to your desired university is not always guaranteed. In other cases, the transfer is approved, but the university doesn’t accept all your credits, which means they set you back a semester or even more.
Lastly, transfer students are offered less financial aid and scholarships than students who started off as freshmen at the college. In the end, it costs you a lot more time and money. This is why it’s highly recommended you plan ahead of time and find out about all the requirements for a transfer to your desired university.

Financial Aid

Financial aid will not knock on your door; rather you have to grab it yourself. An average student can receive up to $8,000 in grants and this is money you don’t have to pay back. Alternatively, there are many scholarships that are offered outside your college. You have to hunt for these as well and there are some that require essay-writing type entries. Make sure you put aside some time to apply for these scholarships after you have graduated from high school. Just make sure these scholarships don’t affect the financial aid you receive from other sources.

Accelerate Graduation

The more time you spend in college, the more money you will be spending on living costs, food, commuting, etc. As soon as you enroll, map out your courses so you can get your degree in a shorter timeframe. Or if you have it in you, try to opt for programs that offer two graduate degrees within the same timeframe. These programs are difficult, but when you graduate you can proudly list two separate degrees on your resume.
To fast track your degree, start off by making a list of required courses and then fill the remaining requirements with courses that will help you with your desired career path. Then double-check all courses for prerequisites so you can take those courses in an earlier semester. It’s also a good idea to visit faculty heads to get an idea of the type of courses you should take. Some colleges also allow students to take up to six courses, instead of the standard five per semester.
However, keep in mind that just to stay out of debt you don’t want to compromise the quality of your education. If you happen to get disqualified from your program, you will be doing more harm than good. Take on only as much as you can manage. Alternatively, you can take summer classes and some colleges have full semesters during the summer months as well.

Pay In Installments

Find out if your college has a payment plan that allows you to pay tuition fees in monthly installments. This option is quite feasible, especially if you are working part-time or your parents are assisting you. This option is better than taking out a student loan, which will cost you a lot more in the end because of the compounding interest.

Cut Living Expenses

Tuition fees are non-negotiable, but consider where else you can cut costs. For example, if your college is close to home, consider commuting instead of living on campus. You will still be paying for the commute, but the costs are much lower. Moreover, if you are living with your parents, you won’t be paying for basic necessities, such as food and laundry. Apart from living costs, you can save by renting textbooks rather than purchasing them and reducing eating-out expenses.


Most colleges offer on-campus work-study opportunities the can help you pay off some of your student debt. Students can also apply to become a resident assistant which will cover residence costs. Alternatively, you can find part-time work near campus, although keep in mind that working for too many hours will take away from study time. If your grades drop, again you are doing more harm than good. You need to maintain your grades to retain your scholarship. Also, earning too much money can affect your financial aid, so be mindful of that as well.

Prepay Loans

There are a number of things that help you cut loan balances, such as tax refunds, pay raises and cash gifts. Even when you are at school, you can actively start paying back your loan, because down the road you will be paying a lot of interest.

Take Your Time

Don’t feel overwhelmed with the pressure of paying back your loan. Your priority should be to study as well as you can and move towards your goals and ambitions. When you are stressed you won’t be able to manage your funds properly. So, take a breather and make informed and strategic decisions that will help you prevent getting in debt as a student.

Become an Intern

Most internships are unpaid but you can find ones that pay minimum wage. With a steady paycheck coming in, you can easily cover your on-the-top costs and also add experience to your resume once you graduate.

Avoid Credit Cards

The last thing you want is more debt on top of your already existing student debt. Credit card companies actually feast on college students. Sometimes, you will find representatives from credit card companies right on school campus. Avoid applying for a credit card, even if you tell yourself that you will use it for emergency situations only. If you find yourself in a fix, it’s better to borrow from family and friends, rather than from a credit card company. The interest you will be paying on a credit card is a lot higher than if you were to borrow from someone else.

Record Your Expenses

A strong money-saving strategy is to keep track of your spending. When you write down every single expense you make, it will help you determine which costs you can avoid in the future. Creating weekly, monthly and yearly budgets will help you stay on track so that you don’t blow through your savings in a single college year. Try to get frugal when it comes to extra things, like clothes, foods and hanging out. As tempting as it is, only spend on special occasions instead of going out every Friday night.

Make Your Own Meals

If you are living at home or your on-campus residence has a kitchen, make your own meals. Cooking your own food is a lot cheaper than buying campus food or dining off-campus. If you have a meal plan, make sure you use it instead of spending extra money. This frugal living is not only cheaper but also healthier.

Get Used Textbooks

Textbooks are a huge expense. Sometimes professors release new versions with minor changes just to coax their students into buying new textbooks. Try to connect with students who have taken the course in the past semester, or year. You can buy it off them for half the price. Alternatively, some bookstores at colleges carry old textbooks and also buy back your old ones. You can also look online for used textbooks.
Preventing student loan debt is not easy, but reducing it is fairly straightforward. All it requires is great planning and patience on your part. You will thank yourself for making these efforts when you graduate with a minimal loan while your batch mates have huge sums of money to pay back.


There’s a lot of options to choose from! What should matter most is that you feel comfortable while studying, but make sure you think of your future too and how it would feel spending all your hard earned money once you get a job, on paying off your debt. You study to get an awesome job, don’t forget =)

What do you think you could do to save money?

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