How To Avoid Student Loans: 7 Key Ways

College is a big next step for many high school graduates. The same applies to people pursuing graduate degrees or changing careers. But how to avoid student loans is also a big question.

The average total cost of a four-year college education comes in at around $122,000. And it’s much higher if you factor in private colleges. In addition, the average cost of a master’s degree could run you $30,000 a year or much more.

As a result of this high cost, most people have to rely on some type of debt vehicle to fund their college education, like living off student loans. It’s especially true if you’re trying to figure out how to pay for college with no money.

But student loans can create financial barriers for you later on. Here’s why you should avoid them, and figure out how to pay for college without loans.

Why you should try to avoid student loans

What’s the big deal about student loans anyway? They’re so common that you might not think twice about taking on a student loan payment.

Undergraduate and graduate students alike choose to take out student loans. Some from necessity, others because they don’t have enough information. But here’s why you should avoid them.

Average student loan debt

In many cases, what comes after a great college experience? Student loan repayment. Loan repayments are really costing people in the long run.

The typical federal student loan debt as of 2022 is over $37,000. That’s a lot of money for borrowers to pay back!

And it’s not what you need right after you graduate college. You’ll have plenty of other money decisions to make; so if you can, you want to avoid adding student debt to the list.

High interest on loans

Student loan interest fees aren’t cheap. The average interest for federal loans for an undergraduate degree is 4.99% for 2022-2023 using Credible.

Key steps to avoid student loans

Finding the money to attend school can be a stressful experience. That being said, here are some key tips for how to avoid student loans.

1. Start saving early to pay for college while learning how to avoid student loans

When it comes to saving for college, every dollar you’re able to save will reduce the amount you owe when you start getting your tuition bills.

If you can get a part-time job, focus on employers that have some sort of college savings benefit. It can offset the amount of money you need to save.

Discuss finances with your parents

If your parents are helping to pay for college, have a conversation with them to talk about putting money aside beforehand. That way you can avoid living off student loans. You can also discuss the various savings options that provide additional benefits for college savings, like a 529b.

It’s a good idea to have this conversation as early as possible. You can determine how much of your college costs your parents can help pay and how much you’ll be paying on your own.

Save up

Also, track your savings goal. Create a designated account and build your college savings into your budget. That way you can create a plan for how much you need to save from each paycheck you earn.

Saving for college is a big part of how to avoid student loans. It’s all about taking advantage of the time you have to save as much as you can before your first college bill is due.

2. Compare the cost of your college degree at various colleges

Sometimes your heart might be set on a college because of its reputation or location. But there are many excellent options for colleges that will give you an equally good education, and help you with how to pay for college without loans.

Community colleges and in-state schools

You can get a great education for your first couple of years at a community college, or go to an in-state school. Usually, state tuition is cheaper than out of state, and you can save thousands, so state students take a smart approach.

Some schools offer benefits for in-county students. You can also receive grants from the state if you decide to attend an in-state school.

Calculate savings when learning how to avoid student loans

To determine your potential savings, compare community college costs to 4-year college costs. Also, compare state versus private college costs and the costs of attending college in-state vs out of state. Doing these comparisons can potentially save you a large amount of money on your college education.

As you compare costs, also look at college rankings and reviews to help you make the best decision.

3. Research scholarships, grants, assistantships, and even crowdfunding to pay for college

Scholarships and grants are a great way to pay for college and a key part of how to avoid student loans. They’re essentially free money (based upon specific criteria).

It’s definitely worthwhile to spend some time before college starts to research different scholarships and grants for your program and apply to as many as possible.

Federal student aid

Check out federal student aid options by filling out the FAFSA (Free Application for Federal Student Aid). It will help you figure out what kind of financial aid you qualify for.

Then you can decide to accept it or not, depending on if it’s a loan or free money. Typically, loan options, work-study programs, scholarships, and grants are possible.


You may not qualify for an assistantship in your first year, but it’s possible to get one as you gain more college experience. It can also help knock a chunk off your college expenses.


Crowdfunding is another option when you need to know how to pay for college with no money. Consider crowdfunding sites to crowdfund everything from tuition to books.

Be sure to keep your grades up before and during college to keep your scholarships

Many scholarships target students who do well academically. In addition, some scholarships focus on certain demographics in addition to good grades e.g. scholarships for black women.

If you want to qualify for any of these scholarships, you’ll need to work to either get your GPA to the required cut-off or work to maintain your GPA if you are above the cut-off.

Most scholarships require at least a 3.0, while some require you to maintain a 3.5 while you are in college. Make sure you are aware of the requirements to keep your scholarship.

Maintaining this GPA can be much harder than it would have been in high school or even undergrad. That’s why it’s best to seek out academic support if you need to.

You can start researching scholarships on

4. Research your student loan options

After finding out how much college will cost, decide if you should take on loans and what type of loans to get.

Ideally, you want to try not to take on more than what you’ll earn your first year out of college. Your monthly payment for a loan after college should be no more than 10% of your monthly income.

You’ll be able to pay back your loans based on your future income and within a reasonable timeframe. Or use this guide as an alternative for how to avoid student loans entirely.

Some key factors to keep in mind when reviewing student loan options:

The type of loan (e.g. federal or private).
The repayment options (including rules, restrictions, and penalties).
The interest rate on the debt.
The type of interest rate being offered (e.g. fixed vs. variable).
Exactly what your monthly payments will be on the loan before you sign the dotted line.
Determine if the loan type you qualify for requires a co-signer. And consider who that person would be.

5. Research the average salaries for people in your field of study

The whole point of getting a college education, outside of expanding your skill set, is to earn a decent income.

The goal is that this income will allow you to have a good quality of life. It will also allow you to pay back your student loans within a reasonable time after you start your career.

Count the overall cost

Part of how to avoid college debt is picking the right field. If your college education per year costs more than the average annual salary in your field of study, consider cheaper colleges to attend.

Alternatively, you can research similar fields or industries that pay more on average and change your course of study.

6. Avoid living on campus

One of the major perks of going off to college or grad school is being able to live on your own. But if you’re wondering how to avoid college debt, not living in your college dorms is a great way to do it.

Even if you don’t want to live at home, an off-campus apartment can be a cheap alternative to campus living. It can be a solution for how to pay for college without loans.

In the close vicinity of college campuses, you can typically find rent that’s much cheaper, as long as you don’t live in a major city.

Of course, without a paid college meal plan, you’ll have to spend money on food. But you can keep your food budget small as long as you are meal planning at home.

Budget your money when learning how to avoid student loans

Budgeting is the key to how to pay for college with no money. When you first arrive at college, it’s smart to keep your living expenses low. In addition to living somewhere cheap, you should also opt for keeping bills like phone, internet, and insurance low.

While you may know how to avoid student loans, you can also start college without debt from cars or credit cards. College is a great time to be frugal.

Get great at budgeting during your academic year and improve your credit score. In a few years, you’ll be handling money extremely well.

7. Take advantage of work-study

Work-study is a great way to avoid student loans. It’s very possible to maintain good grades and still work a few shifts per week.

To really benefit from this, pick a low-maintenance job. Working in a library or administrative environment gives you the opportunity to work on your assignments while you are not busy helping other students.

There are also some companies that will pay for school for you. Starbucks famously does this for its employees. If you are working a regular job that isn’t work-study, look for one that can help with your education expenses and stop you from living off student loans.

8. Accelerate your time in college

College is a fun time but it’s also expensive. Knowing how to pay for college with no money starts with planning ahead. Here’s how to avoid college debt and potentially make the process faster, using programs like the CLEP and AP tests, designed by the college board.

CLEP test

To make college take less time and money, test out of some classes using testing programs such as the CLEP test. The test allows you to get college credit for courses that you test out of. Then you won’t have to pay to learn subjects you’ve already mastered.

AP courses and tests

You can also take AP (Advanced Placement) courses while in high school. Sign up for classes at your school. Providing you pass the test, these will then transfer for college credit, so you don’t need to pay for them later.

Accelerated courses and scheduling

You can also take more college courses without time off. Take summer classes, and accelerated courses, and fill your school schedule up. Getting through school fast is a big part of how to pay for college without loans.

Take a full course load if possible without it becoming overwhelming, because the sooner you finish school, the sooner you earn more money.

9. Research online options when finding out how to avoid student loans

Online college courses still cost money, but due to the flexibility, they can really help with your budget and keep you from living off student loans.

When it comes to how to avoid college debt with online classes here’s a key tip. If you can take some courses online, it can free up your schedule to work more hours at your job, and help you pay off your education in cash. Think about the big picture when creating your course schedule.

Final thoughts on how to avoid student loans for a great financial future

You’ve explored the best ways how to avoid student loans. Remember that your college experience will be much more enjoyable if you know how you’ll pay for it before you start.

If you do take on student loans, make sure you understand how your loans work. Then create a repayment plan.

Finally, if you have a job while in school, you can start paying your loans back early. Or, make interest payments to gradually reduce your overall long-term debt obligation.

Now you know how to avoid student loans. For more financial information, check out our Clever Girls Know podcast and free money courses.

The post How To Avoid Student Loans: 7 Key Ways appeared first on Clever Girl Finance.

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