Alternatives to Student Loans to Pay for College Without Debt
Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their eight wonderful grandchildren and two cats.Read full bio
At a Glance
According to Business Insider, the average cost of going to college in the U.S. is between $9,330 and $13,620 per year, based on the number of years attended and whether the college is public or private. That’s a tough financial obligation to take on. Most attendees apply for student loans because they can’t afford to pay that out of pocket.
Many students graduate with student loan debt of up to $30,000. That’s without going on to business, law, or medical school. Professionals in those fields can accumulate debt they’ll need several years, even decades, to pay off. Thankfully, there are alternatives. Instead of applying for a student loan to go to college, consider one of the following student loan alternatives:
1. Research and Apply for Scholarships
College applicants often think one-dimensionally when it comes to scholarships. If they don’t get offered one by the school, they stop looking. That’s a mistake. There are thousands of different scholarships out there for college students. Do your research. Look for non-profit foundations, organizations, and private companies that offer scholarships.
2. Inquire About Work-Study Programs
When you fill out your FAFSA, check the box for federal work study. The federal government doesn’t just offer student loan debt forgiveness. There are federally sponsored jobs on campus that will help you pay tuition. The school itself might have similar opportunities. Ask your college recruiter or guidance counselor about their availability.
3. Apply for Grants that Don’t Create Debt
Excessive student loan debt can lead to a need for student loan debt consolidation after you graduate. Grants are free money that you don’t need to pay back. Like scholarships, there are thousands of grants available. They’re offered by the federal and state governments, colleges and universities, and non-profit foundations.
4. Work Extra Hours and Save the Money
After graduation, you’ll be faced with the question of whether to pay off student loans or invest. Getting a part-time job or working extra hours at your full-time job before going to college eliminates that dilemma. Work for the money to go to college, save it in an interest bearing or investment account, and avoid going into debt to get your education.
5. Find a Job with Tuition Reimbursement
There are several companies that pay off student loans for employees. This list includes big names like Fidelity, Google, Hulu, and Nvidia, just to name a few. When you graduate, make it a point to ask about student loan relief from potential employers. The list of firms that offer it is growing daily. As a recent graduate, you’re valuable. Be selective about where you work.
6. Ask about Income-Share Agreements
This is like taking out a personal loan to pay off a student loan, except you’re borrowing your own money. An income-share agreement (ISA) is a contract with a company that allots you money for college in return for a percentage of your income after you graduate. Repayment begins after you leave school and hit a certain income threshold.
The Bottom Line: Don’t Wait for Student Loan Forgiveness
If you follow politics, you may be asking the question, “Will Biden forgive student loans?” He might at some point, but don’t wait for it. Any of the suggestions above is a step up from having to pay off private or federal student loans when you graduate. Look into all of them. You may be able to take advantage of more than one of these cost-saving techniques.
Frequently Asked Questions
What can I use instead of student loans?
There are scholarships, grants, and work-study programs that can help you pay for college without a student loan. You could also work extra hours to save the money, get a job that pays off your student loans after you graduate, or sign an income-share agreement with a company that’s basically a loan against your future income.