How To Avoid Student Loan Debt

With the rise in tuition costs student loans are a great to help expenses to get your degree. But while you explore your loan options it is advised to be well aware on ways to try and avoid student loan debt. Learn more on how to avoid student loan debt before you start applying and much more.

Updated by Annany Sah on 21st December 2019

As we know that in the US, the Student Loan is a huge market because the student loan debt was about $ 30k in 2017.

It becomes huge stress for the students because they want to take admission to a good college but withdraws because of the huge tuition fees. As the survey conducted by the US government that the student loan debt is about $1.4 billion. The average student in the US has about 22k in loan debts. The lowest student debt recorded in the world is in Germany where the tuition fees are free and so the loan debts is$2400.

So if you are already in debt and want to avoid student loan debt as much as possible this article will help you and if you will follow these steps you will be able to manage your loan debts.

Table of contents

Facts about students loan debts

These are some of the statistics which will give the exact idea that how big are the student loan debts are in the US:

US Facts

  1. 44 million has student loan debts in the US.

  2. 37% of students who are below the age of 30 and 65% of students who are over 30 are in student debts.

  3. The monthly average payment is $351.

Global Facts

  1. The British Graduates have estimated students loan debts of about $55000.

  2. In Canada, the student doesn’t have to pay his debts until he/she is earning $25k yearly.

  3. The same goes for Australia a student doesn’t have to pay until he/she is earning about $ 45k yearly.


Before you Start Studying

Before you start studying at a good college you need to set some things up before you apply somewhere. These are some of the points which will help you avoid huge student loan debts.

1) Get a part-time job and save money

Before applying to a college and pay for the tuition fee you should get a part-time job so you can make some money in the process and save some money for the college in which you have decided to go and it will generate some income for you as well. By doing so you will be able to avoid a huge amount of loan debt.

2) Get a Scholarship or grants

Scholarships and grants are the best way to generate some part of your income which helps you cover the entire amount to be paid for the tuition fees and to get a scholarship and you have excelled in your studies and at your school or college.

3) Choose a less expensive college

It’s good to choose a less expensive college because it will help you to take less amount for the loan and the repayment will be easy for you or in some cases you even don’t have to take up student loans. 


Worried about your college tuition? Learn more about student loans


Applying for Student Loans while you are Studying

While applying for student loans you need to keep the following in mind to help avoid large amounts of student loan debts. There are some ways through which you can avoid getting a huge amount of loan amounts:

  1. You should take an amount that you can be able to repay in the future.

  2. You should prefer taking federal loans because they give you a deferment period.

  3. Avoid taking private loans because they charge interest on a daily basis and it will become a huge amount by the time you start repaying.

If you are studying and you are earning well for yourself and you think that it will be enough for your college but it won’t be enough for your college nor your expenses.

By the time you finish your college, you be knee-deep in loan debts and the stress comes in on how to repay debts on time.

There are some ways you can opt to avoid getting huge debts and to repay on time.

Optimal Expenses

If you have already started studying then you will have all kinds of expenses and some of them will be your necessities on a daily basis so you need to optimize your expenses and spend on only what you need the most like your basic necessities.

Payments towards the loans should be in Installments 

You should be making payments in installments and not a full payment because it will hamper your daily expenses, if you will pay the whole amount in one go then you will not be left with anything and after that, you will borrow some money from somewhere else and another debt will be created.

Crowdfunding

It’s a new technique which is being used many of the people which is raising money from a pool of individual like friends, family, co-worker, individual investors primarily via social media or crowdfunding platforms.

There are many benefits of this because of crowdfunding it open your reach, concept, efficiency.

Employer tuition reimbursement

There are companies who are willing to pay the entire or part of the student fees, it’s a win-win situation for both the student and the company because it helps the company to gain loyalty and goodwill and the student gets a free education. The list of companies that provide Employer tuition reimbursements is Starbucks, an uninterruptible power supply(UPS) and many more.


If you already have student loan debt

There is a big chance that you might have some debt that is yet to be paid. if you have student loan then there is no need to worry because there are ways that can help ease your burden and pay off your student loans fast.

Consolidation of loan

Consolidation of loans is a great process to reduce your multiple payments into monthly payments and also reduces the loan interest. It combines multiple loans into one and that’s easy to pay with less and interest and monthly payments to worry about.

Student loan Refinancing

Student loan refinancing is a great way to manage your debts, it is advised to have an in-depth understanding of refinancing to take full advantage of it. It’s a process of exchanging your federal and private loans into a new loan with a new and low-interest rate and a single payment monthly. Student loan refinancing is a great way to manage your debt, it is advised to have in-depth knowledge about it so you can take full advantage of what refinancing has to offer.

Make an extra payment

I know that it’s a risky step to take because most people will not agree with it but it’s really helpful in the long run because it reduces the payment and you can save for yourself in the end.

How to minimize student loan debts

  1. File (FAFSA) to explore federal loan options

  2. Start Saving before college

  3. Enroll in a less expensive college

  4. Cutting Expenses

  5. Get a part-time job

  6. Pay loan debts while in college

Ways to avoid student loan debts

  1. Start saving early on

  2. Apply for community college

  3. Fill the FAFSA form

  4. Apply for scholarships and grants

  5. Don’t use Credit cards

  6. Avoid student loans


Conclusion

We know that it is a costly process for you because it is not easy to study and avoid the loan entirely so make a financial plan and stick to it because if you can’t manage your own plan you will knee-deep in a debt so so make a budget and stick to and see you will likely to succeed.