How to Avoid Debt by Paying for College Without Student Loans

With total student debt in the U.S. exceeding $1 trillion, Americans seem to be accepting that going to college and racking up debt go hand-in-hand. But contrary to common belief, a good education doesn’t have to leave you (or your kids) saddled with a ridiculous amount of debt.

College is expensive, yes – and it’s only getting more expensive. But the problem isn’t just related to cost. It’s also influenced by our collective attitude about debt: namely, that we can accumulate it today and deal with it tomorrow.

According to the nonprofit American Student Assistance, two in five student borrowers are late on their repayment bills within the first five years. Meanwhile, credit card debt is on the rise for middle-aged Americans, many of whom are using plastic to cover expenses while they help their kids pay for school. Obviously, we’re biting off more than we can chew.

Believe it or not, it is possible to pay the bills with little to no student loans in many cases. It just takes a different way of thinking.

Alternatives to Borrowing

It’s simple but true: the sooner you start saving for college, the more money you’ll have for tuition when the time comes to enroll. Every dollar saved is a dollar you won’t need to borrow. Many states offer income tax breaks for contributing to state-sponsored 529 plans. As a bonus, money withdrawn from these accounts and used to pay qualified college costs is exempt from taxes.

If you or your family is still overwhelmed by the cost of college, consider readjusting your expectations. You don’t need to go to an Ivy League school to get a good education. State schools can offer courses on par with pricey private schools. Attending community college for your general education can save thousands of dollars and still allow you to transfer to a four-year-school. Additionally, taking advanced placement courses while still in high school can shave up to a year off your college education, saving more dollars.

Other ways to save money include taking online courses or considering enrollment in an accelerated three-year program. Instead of going straight to college, you could enroll in a one- or two-year certificate program and get qualified for a trade, knowing that once you’re employed with a real income, you’ll be in a much better position to afford university. And if you’re thinking about joining the military, here’s another reason: Uncle Sam will pay for part of your college bills.

Have your heart set on a private school? Keep in mind that not all schools have the same expectations. Do your homework and find out which colleges will most appreciate your particular achievements and GPA – and offer the best financial aid packages. Meanwhile, apply for as many scholarships as humanly possible.

Choosing Safer Loans

Of course, sometimes there’s no getting around it; you’ve got to borrow money to pay the bills. But you can still borrow smart.

Stick with government-sponsored loans whenever possible to save on interest. If you’re a student, Stafford loans are just 6.8 percent, and lower if you qualify for financial aid. For parents, federal PLUS loans are available at a rate of 7.9 percent.

When considering a loan, make sure to take all terms into account, including grace period, interest rate and repayment options.

Educate Kids About Financial Responsibility

Parents: The earlier you start talking about college, the better. Many high school graduates (and their moms and dads) are shocked to discover how much an education really costs. But by the time they’re enrolled in a school, it’s too late to start saving.

Before your child begins searching for schools, find out how much fits into their budget. Decide how much of her own money your child realistically needs to contribute and encourage her to start saving. If you or another relative is planning to foot some or all of the bill, you should at least expect your child to earn his own spending money. offers a great calculator tool to help students better understand the true cost of paying back student loans.

When money seems to grow on trees, it’s a lot easier to spend. But when kids realize how much hard work it takes to earn a dollar, they’ll be less likely to part with their paycheck. Financially responsible students are more likely to choose affordable schools, save wisely for college and avoid debts they can’t repay.

Getting Out of Debt

Sometimes you try to play it smart and you still end up drowning in debt. Unfortunately, there’s no easy way out of student loan debt – even with bankruptcy. But the right bankruptcy plan can help alleviate debt troubles tied to student loans – such as credit card debt or mortgage default.

If you or a child is struggling under the weight of debt and you’re tired of mounting credit card bills, impending foreclosure and harassment from bill collectors, it’s worth investigating bankruptcy as a realistic option. Schedule your free personal debt evaluation with a DebtStoppers bankruptcy attorney today and find out whether bankruptcy is right for your financial situation.

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