Strategies to Avoid Student Debt

Unless you have a hefty college fund, financing your college education may be your only option. College graduates in 2022 averaged $29,000 of student debt. Student loan debt often affects a college graduate’s ability to buy a house and start a family. Don’t burden yourself with high student debt. Here are four strategies to avoid student debt and minimize your loans.

1. Stick to an in-state school or affordable out-of-state school

It is tempting to attend a big brand-name college with a stellar reputation, but you’ll often get more bang for your buck at an in-state public school—or affordable private college (they do exist!): Nebraska Wesleyan University, Northwest Missouri State University and Louisiana Christian University, for example.

Here’s a breakdown of the average cost of tuition by college type for the 2022-23 academic year:

College Type Average Cost of Tuition
Community college in-state $2,501
In-state public $9,377
Out-of-state public $27,091
Private $37,641

As you can see, opting for an in-state public university over a pricey private university could save you over $100,000 on tuition over four years.

2. Avoid private loans

Students whose college costs exceed federal borrowing limits often take out private loans to make up the difference. We don’t recommend it.

For starters, interest rates on private loans are not capped. Private loans also don’t normally offer any sort of accommodations for people who struggle to keep up with their payments. Federal loans, conversely, offer several borrower protections like income-based repayment plans and deferment.

Instead, choose a college that the family can afford with the student borrowing at most $5,500 a year-—or, over four years, $22,000 total. A loan of $22,000 can be paid off by age 31 for only about $250 a month after college. Remember the goal: graduating with minimal debt.

3. Graduate on time

Graduating on time means having a solid idea of your major, taking at least 15 credits a semester, and working hard– fewer beverages, more books. AP or IB credits, summer school, and taking 18 or so credits a semester can get you that degree in LESS THAN four years, leaving you with less debt and earning a real income sooner.

4. Leave your car at home

Your savings from leaving the car at home can fund the premium you’ll incur from living in a dorm, frat, or sorority. Further, if you’re enjoying the benefits of on-campus living—community, proximity, energy, friendships—you shouldn’t need a car.

5. Reduce your expenses

College can be expensive, but you can work to reduce your cost of college. The Cost of Attendance (COA) is calculated by schools (as dictated by Congress) to estimate the total cost of attending for one year. It includes tuition and housing plus books, supplies, transportation, loan fees, dependent care (if applicable), computer/laptop, and study abroad programs. But your True Cost of College may be higher/lower depending on the choices you make. Learn specific ways to Reduce (Or Raise) Your Cost of College

Be a smart college shopper: choose wisely. Then at college, make wise choices. You’ll be thankful you did when your outstanding loan balance is thousands less than what your peers owe.