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10 ways to avoid student loan debt

Hint: Where you go to school counts big time.

Most college students graduate with debt, but there are ways to avoid it. Having strong grades and saving up ahead of time are great ways to plan ahead. Don’t have that kind of time? Consider starting at a free or low-cost school. And if you have to borrow, start with federal loans.

1. Start saving as soon as you can

The earlier you and your family start saving, the more money you’ll have to contribute toward your degree. Put money from summer and after-school jobs in a high-interest savings account to earn interest on the amount you tuck away. Parents might also want to consider opening a 529 account. Like a retirement account, it allows you to deposit money before taxes, which you can only use to pay for educational expenses.

2. Focus on your grades and volunteer

The key to winning most scholarships is a strong academic record, proven leadership skills and personal achievements. If you’re still in high school, take advantage of tutoring if you’re struggling with classes, and look into opportunities where you can volunteer in your community.

When it comes to volunteering, approach it as taking your future career for a test drive. If you’re thinking of becoming a doctor, look into opportunities at a local hospital or health center. It’ll help you get into programs you like and build a relevant resume.

3. Fill out the FAFSA and CSS Profile as soon as you can

The Free Application for Federal Student Aid (FAFSA) is essential to getting federal aid and even some nonfederal aid. But you’ll also need to complete the College Scholarship Service (CSS) Profile to be considered for many nonfederal scholarship and grant programs. Since they both use different formulas to calculate how much your family can afford to pay, you also might be able to get a better deal by filling out both.

Many programs offer funding on a first-come, first-served basis. So you’ll maximize your chance of getting the most funding by getting your applications in as soon as possible when they become available on October 1st each year.

FAFSA vs. CSS Profile: How do they compare?

4. Apply to tuition-free schools

There are a handful of schools that offer education to all students, tuition-free. Some schools like the Macaulay Honors College at CUNY also offer grants to qualified students to subsidize an unpaid internship or semester abroad.

Typically, these schools require a work commitment of 10 to 15 hours a week in exchange for free tuition. And you might have to pay for nontuition costs like housing and meal plans. But they offer one of the best deals out there.

5. Send out as many scholarship applications as you can

Rather than going for a few big, competitive scholarships, focus on a larger number of smaller scholarships with a smaller applicant pool. You might not get all of them, but you’re more likely to walk away with some kind of funding than putting all of your eggs in one basket.

Pay careful attention to deadlines and get your applications in as early as possible to ensure you’re considered before funding runs out.

Our A-to-Z list of college scholarships

6. Consider studying in Europe

Another free or close-to-free option is studying abroad for your entire academic career. European schools are notoriously cheaper than their US counterparts. If you go to a school that charges fees, it likely won’t be more than around $1,500 a semester. Several schools in Scandinavia also don’t charge tuition at all — even for American students.

But there are a couple costs to consider. Travel will be a lot more expensive. You also often have to prove you have access to around $1,000 a month in funds to get a visa. But it’s still cheaper than many other stateside schools.

7. Go to a state school

Going to a state school has a few benefits. First, in-state tuition is often tens of thousands of dollars cheaper than attending a top private school.

You’ll also be eligible for more scholarships and grants, since many are only available to residents. If you’re lucky, you won’t need to borrow at all.

8. Spend the first two years in community college

Don’t have the grades to get a full ride? Didn’t qualify for need-based aid? Consider starting out at a community college and transferring to a four-year program to save on costs. You’ll have the opportunity to improve your GPA and get access to flexible course schedules that are easier to pair with a full-time job.

Look for community colleges with a 2+2 program, where they partner with a university to make the transition as seamless as possible.

9. Live with your family

Living with family might not sound ideal, but it can save you thousands of dollars by the end of your degree. You’ll also likely save on food costs — unless your family asks you to chip in.

Go to school in another state? Weigh the cost of staying in the dorm versus off campus before you decide where to live. In some cases, off-campus housing can be cheaper.

10. If you borrow, take out federal loans first

When there’s no way to avoid debt, look to federal loans first. Everyone who qualifies gets the same, low interest rate and you don’t need a cosigner. Federal loans also come with much more flexible repayment options and more opportunities to qualify for forgiveness than private student loans.

Don’t graduate with credit card debt

While it might be tempting to put small expenses on a credit card while you’re in college, avoid putting more than you can afford to pay back in the next few months. And don’t just make the minimum monthly payments.

Credit cards interest rates are typically much higher than student loan rates. If you need extra money for personal expenses, consider taking out a larger student loan instead.

Bottom line

Focusing on grades, saving up and choosing your school wisely can all help you stay out of debt when you go to college. And if you have to borrow, take out federal loans first. Learn more about paying for school with our guide to student loans.

Frequently asked questions

How can I legally get rid of student loans?

Apply for student loan forgiveness and repayment assistance programs to have all or part of your student debt forgiven. Typically, these require you to work in a public service job for at least two years. It’s also possible to have your student loans discharged in special circumstances, like if your school closed or you become permanently disabled.

How do I reduce my student loan debt?

Reduce your student loan debt by applying for repayment assistance. You can also reduce the cost of your loans by refinancing for a lower rate or shortening your term — which allows less time for interest to add up. Or if you want to reduce the monthly cost, lengthen your term or consider signing up for an income-driven repayment plan.

How is college worth the cost?

That depends on how much you pay and what you value the most. A college degree comes with several benefits that are hard to ignore, from opening you up to more jobs to helping you get a higher salary.

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