How I (Almost) Completely Avoided Taking Out Student Loans

how to avoid paying student loans

As recent college graduates enter the workforce, many of them are saddled with crippling student loan debt. And while student loan forgiveness programs do exist, many Americans do not meet the eligibility requirements for them.

So before you’re stuck looking at a significant student loan balance, consider the following strategy on how to avoid paying student loans by not taking any out in the first place.

How I avoided taking out student loans

When I graduated from high school, I had a four-year, full tuition academic scholarship to the University of Utah. After my freshman year, however, I transferred to Brigham Young University (BYU), where they only offered me a two-year, half tuition academic scholarship.

Knowing I was on my own for my education costs, I started strategizing how to pay for my education without taking out student loans. Here are a few things I did along the way.

1. I chose an inexpensive college

The biggest costs covered by student loans tend to be your school’s tuition and fees. What’s more, those costs have increased 3.5 percent per year on average over the last decade for public four-year institutions.

In many cases, however, you can find a college nearby that charges below-average tuition while also providing a lot of value. That’s what BYU was to me.

BYU is a private university owned by the Church of Jesus Christ of Latter-day Saints. For the 2017-2018 school year, it charges $5,460 a year in tuition and fees for members of the church and $10,920 a year for non-member students.

Despite the relatively low cost, BYU’s business programs – which are why I transferred – are among the best in the nation.

You may need to do some extra research to find a suitable college with low tuition costs, but the money you’ll save years beyond your graduation will be worth it.

2. I applied for scholarships and grants

Not everyone qualifies for academic scholarships out of high school. Depending on how studious you are, however, you can usually become eligible after your first semester or two. The program for your chosen area of study may also offer scholarships for their students.

Your university isn’t your only source for scholarships either. There are several organizations and companies helping students cover the cost of their education. And don’t forget to apply for the Student Loan Hero $1K Scholarship while you’re at it.

During my time at BYU, I applied for several scholarships in the business program and with outside organizations. I also studied hard to maintain good grades, which qualified me for a full-tuition academic scholarship after the initial one ended.

Later, after I was married, my wife and I qualified for Pell Grants. The money we received from scholarships and grants covered most of our tuition costs.

3. I found a job

Depending on the program you’re in, your studies may take up a large chunk of your time. Plus, there’s the social aspect of college to consider as well.

Between these two factors, it’s not always easy to find the time to work. If you want to decrease your dependence on debt, though, getting a job goes a long way.

I worked at least 32 hours a week doing customer service for a nutritional supplement company while going to school full-time. The income I earned provided enough cash to cover my living expenses, my remaining tuition after scholarships, and then some. In fact, I took a six-week trip to Fiji and New Zealand one summer without going into debt.

Of course, this setup wasn’t very conducive to a robust social life. I woke up early and went to bed late, with most of my time in between dedicated to classes, work, and studying. But I still managed to allocate my time in a way to spend time with friends and date my future wife.

4. I stuck to a budget

Regardless of how much income you earn, living on a budget can help you manage your cash flow. It can also prevent you from overspending on unnecessary things, which can increase your need for student loans. You can do a monthly budget or one for each semester.

When I began budgeting in college, I used a simple spreadsheet and tracked my expenses manually. Later, I upgraded my spreadsheet by adding formulas that automatically updated the budget when I added new transactions. I planned my expenses for each month and left money for savings.

Now there are plenty of budgeting apps that make the process even easier. You’ll be able to easily keep track of where your money is coming from and where it’s going.

How to avoid paying student loans

Far and away the best way to avoid paying student loans is by not taking out a student loan from the start. Despite all of my efforts, things did change when I married my wife midway through my time at college.

I switched to a part-time schedule at work, our expenses increased, and my wife was in a car accident that left her with some chronic health issues. We also made some mistakes along the way, including paying for a couple of vacations with student loan funds.

In general, though, our habits lessened our need for student loans. I left BYU with $9,133 in student debt. That’s well below the 2012 student loan debt average of $32,300 for graduating students from private nonprofit colleges.

While the student loan crisis is getting lawmakers’ attention, it may take years for meaningful changes to happen in that realm. In the meantime, if you want my advice on how to avoid student debt, it’s this: find ways to sidestep it in the first place.

Need a student loan?

Here are our top student loan lenders of 2018!
LenderRates (APR)Eligibility 

1 = Citizens Disclaimer.

2 = CollegeAve Autopay Disclaimer: The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of
Smart Option Student Loan customers.

3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3.92% -
Undergraduate, Graduate, and ParentsVisit CollegeAve
3.62% - 11.85%*3Undergraduate and GraduateVisit SallieMae
2.93% -
Undergraduate, Graduate, and ParentsVisit CommonBond
3.46% -
Undergraduate, Graduate, and ParentsVisit Citizens
4.21% - 9.69%Undergraduate and GraduateVisit LendKey
3.35% - 10.89%Undergraduate and GraduateVisit Connext
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.