9 min. read

Student debt in America is at a record-setting high, hampering most post-educational dreams of independence and prosperity.

It’s no secret that student loan debt is a burden for most people who choose to go to college. The numbers are staggering. About 70% of students graduating from public universities have some form of student loan debt.

Those numbers are even higher for private universities. So how do we help alleviate or eliminate that problem? Let’s examine some of our findings about the student loan debt crisis.

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First, we need to recognize that this is a systemic problem. But we’re not going to get political in this post. We’re going to do our best to lay out what others have found to be their keys to success for drastically reducing or entirely eliminating their need for student loans.

You don’t know what you don’t know. That was totally us until we were halfway through our sophomore year of college. Blindly along for the ride. That’s when we started to take an interest in personal finance. We realized that we weren’t on the path we wanted to be on.

We soon began immersing ourselves in books, blogs, and other resources, desperate to find a change. You can read more about our story on our About Us page.

Student Loan Balances by Age

Interesting Questions to Ask Ourselves

The first question that we asked ourselves when we embarked on this vendetta against student debt was a pretty basic one. Where does all of our tuition money go?

How are Colleges Funded?

Looking at the numbers, of course, only lead to an onslaught of more questions.How to reduce the cost of tuition became the central theme from which sprouted all of the other questions that we had. Mainly, our concerns pivoted around student financial literacy in general.Why are students financially illiterate, and how can we improve this?

Why do an increasing number of students think a college degree is required in order to be successful?

Is there an acceptable amount of student loan debt to have, in consideration of the starting salary of most jobs?

Is it acceptable to take a year off before going to college in order to save money for school?

Are private schools better than public universities and are the costs worth it?

Average Cost of Attending College

Nipping at the idea of taking a year off before starting school in order to put some money away – how acceptable is it to spend an extra year or two obtaining a degree as a part-time student while working to cash flow the degree?

Why are students allowed to take out more loans than necessary to cover other expenses, such as funding vacations and partying?

Is a four-year degree even necessary? Or can a two-year degree with some job experience be just as beneficial?

Median Annual Earnings of Full-Time Employees Based on Education Levels

In a world that is so focused on higher education, why don’t we consider trade schools and apprenticeships as a viable option more often?

When is it considered ok to take out student loans, if ever?

If you have a full ride, partial scholarship, or if your parents are paying for everything – should you still find a job to gain soft skills and experience? Does this answer change based on the school that you attend?

Is Student Loan Debt Unavoidable?

We asked the personal finance community for their input on this topic. Some said that it’s impossible to eliminate or drastically reduce your need for student loans. This is why they felt this way:

They didn’t understand the implications/impacts that having student loan debt would have on them. So, they ignored the fact that they were borrowing money to get an education, seeing it as the normal thing to do.

Lack of financial knowledge and poor money management was a common answer.

This is similar to our story, at least at the beginning of college.

Tuition costs were too high, and unavoidable.

Average Undergraduate Tuition and Fees for Full Time Students

They didn’t get any help from their parents. Some even said that having high earning parents hurt their ability to qualify for aid, despite not receiving any assistance from their parents.

Changing majors too many times lead to being in school longer and graduating past the 4-year mark, which added additional costs.

Many stated that they wished they had pursued and applied for more scholarships. Thus, missing opportunities to reduce their tuition expenses.

Even while working part-time, they were only able to cover their cost of living, not tuition. Some said they could only find minimum wage jobs with minimal hours. Others said it was difficult to find jobs over breaks if they elected not to work during the school year.

They chose to attend a private university without realizing the additional costs that would come along with it.

They had an inability to work a lot of hours because they had to maintain their GPA in order to keep their scholarships.

Here's How to Avoid Student Loan Debt

On the contrary, we also heard back from a lot of people who said they were able to reduce their student loan burden significantly. Some even said they were able to graduate entirely debt-free. Here’s how they did it!

Choosing to attend a community college for their first two years helped to reduce their overall costs.

Deciding to join the military was another option. This opened many opportunities to receive money for college tuition. Read more about some of those programs here.

Finding a well-paying job to work at while in college allows you to earn more, which means more money to afford tuition! This is true regardless of how many hours you work, earning more always helps.

Taking advantage of AP classes/exam credits while in high school allows you to enter college with credits. This reduces the number of classes you’ll need to pay for.

Attending an in-state public university helps keep costs lower.

Electing to participate in dual enrollment while in high school, which allows you to earn college credits, can shave an entire year off your degree, or more.

Sticking with the same degree doesn’t add additional years to your graduation timeline. But don’t pursue something you know you won’t like!

Taking advantage of CLEP tests. These let you test out of a variety of college classes you’d otherwise be paying full price for. Read more about that here.

Utilizing the library and only purchasing used books whenever possible. This can save several thousand dollars over four years.

If possible, choose to live at home with your parents and commute. Room and board + meal plans can add tens of thousands of dollars to your overall college costs.

If living at home isn’t an option, get creative with your housing and meal plans. You can consider becoming a Resident Assistant, or living with a few friends. Sharing rooms can reduce your housing bill and utilities by a large margin.

Continuing to apply for scholarships throughout college, not just while you’re in high school. Even the small ones help. Many others are well worth the time spent applying for them!

Finding a job that offers tuition assistance/reimbursement. This one is huge – Starbucks, Chipotle, Dunkin Donuts, UPS, Wells Fargo, and many more organizations offer these programs. You essentially receive free tuition money as long as you meet the grade requirements.

Seeking internships and co-op opportunities. This is a double win – get paid and gain experience in your field. Bonus points if they count as college credits.

If it's Possible, Why Aren't More People Avoiding Student Loans?

In our opinion, students just aren’t making well-educated decisions because they simply don’t know any better. They’re financially illiterate because they didn’t learn the basic life skills during school.

Much of what is described in this post isn’t new information. People ignore the price tag that comes along with their college education. However, it needs to be a part of the decision-making process. Private universities are continuing to see a greater increase in enrollment over public universities.

Between fall 2000 and fall 2016, undergraduate enrollment increased at a greater rate at private for-profit institutions (127 percent) than at private nonprofit institutions (27 percent) and public institutions (25 percent).1

Many refer to minimum wage increases not keeping pace with rising tuition costs as a reason why college isn’t as affordable as it used to be. However, students are actually working less than they previously were.

In 2005, 48% of full-time undergraduate students aged 16-24 had some form of employment. In 2017, that number decreased to 39%. Only 6.5% of full-time undergraduate students aged 16-24 work more than 35 hours per week.2

Only one in three people said that costs influenced their college enrollment decision. Unfortunately, we often focus on fixing problems after the fact rather than preventing them.

Distribution of Student Loan Accounts

Improve Your Financial Future by Avoiding Student Loan Debt

Find the right balance of work and school that fits your lifestyle and needs. Working too much can add a significant amount of extra stress. Not to mention, if you don’t do well in your classes, you won’t pass. That’ll end up costing you even more money in the long run.

You are allowed to cook your own food rather than purchasing a meal plan or going out to eat all the time. However, there are many ways to obtain student discounts and freebies. This may come as a surprise to some, but seriously – no-one is stopping you.

If you do have to take on some student loan debt, avoid private loans at all costs.

Take full advantage of your student discounts. This includes subscription services, local businesses, and anywhere else that offers one. You’d be surprised how often student discounts are offered!

Learn to budget and manage your finances. The sooner you start, the sooner you’ll be heading in the right direction.

College is a great time to experiment with minimalism, see what you actually need.

If your parents are encouraging you to take out student loans, it’s okay to tell them no. They aren’t going to be the ones who are stuck paying them back. A vast majority of society does not have the fundamental financial education necessary to make well-informed decisions. So, make up your own mind.

If you’re able to graduate with little to no debt, you set yourself up to be able to invest significantly more right out of college and really put compound interest to work in your favor. This kickstarts your journey to Financial Independence!

Student debt is a product that has been sold to us with such repetition and intensity that most people believe they can’t live without it. (Unknown)