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How to Avoid Student Loans and Why!

Are you about to go to college and wondering how you are going to pay for it? Or maybe you are in college now and racking up student loan debt as we speak. Read on to learn about student loans, how they work, and for some tips on how to avoid them!

Before leaving for college I had no idea about financial aid or how student loans worked or how they would be a part of my life for such a long time.

I wish they taught you about student loans, and other things like budgeting and bills, in high school. But they never really prepare you for adulthood.

If I could go back in time and tell my younger self one thing, I would tell myself to research and learn about these things on my own before college, and well before college so that I could’ve been more prepared.

Pin image with text: Everything you need to know about student loan

So here I am, hoping to help you to prepare for college and hoping that you can learn from the mistakes I made along the way!

Or, if you are out of college already, I hope I can help push you to pay those student loans down as fast as possible so you can save yourself money!

Related Post: How to Use Student Loan Financing to Save Money + Earnest Loan Refinance Review!

So, what are student loans? 

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Student loans are essentially money that people borrow to help pay for school. Things like tuition, books, supplies, housing, etc. When you apply to borrow this money, the lender attaches an interest rate to the loan. Interest rates can range anywhere from 3% to 8%. The lower the interest rate, the better!

The keyword I want you to remember from above is “borrow”.

This money is borrowed from either the government or a private source and it has to be repaid! And it’s up to you how long it takes to repay and how much it costs you to repay it.

The longer it takes you to repay these loans the more you will have to pay for the loans in the long run, that’s where the interest rate comes into play.

Unless all of your loans are subsidized federal loans, your loans will begin accruing interest as soon as you receive it.

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Definitions/explanations of common words associated with student loans:

Federal Loans – these are provided by the government and the terms and conditions are set by the law. Your school typically determines your eligibility through the FAFSA. There are 2 main types of Federal Loans:

-Direct Subsidized Loans which are for undergraduates with a financial need.

-Direct Unsubsidized Loans are for all undergraduate, graduate, and professional students. Your eligibility is not based on financial need.

There are 2 other types of federal loans that don’t directly apply to students off the bat:

-Direct PLUS Loans are for graduate and professional students and parents of undergraduate students to help pay for expenses not covered by other financial aid. Eligibility is not based on financial need.

-Direct Consolidation Loans allow you to combine all of your eligible federal loans into one single loan from a single lender. You will usually want to do this once you graduate to make it easier to keep up with payments.


Private Loans – these loans are provided by private lenders (like a bank, credit union, or another lender). They often do not have the best terms and conditions compared to federal loans so only go this route if you don’t qualify for federal loans and absolutely have no other way to pay for college.

Pin Image with text: How to avoid student loans and why!

How Student Loan Interest Works:

Here’s an example of how interest works: let’s say the first semester you are loaned $3,000.00 unsubsidized at an interest rate of 6% in August. $3,000 x .06 = $180. Now that $180 in interest is for the year, so divide that by 12 to get your monthly cost. $180 / 12 = $15.

So for the first month, you are charged $15 for interest but, if you don’t pay that interest, it compounds the next month (you are charged interest on the new higher total). For September it would be: $3,015 x .06 = $180.90. $180.90 / 12 = $15.08. $3,015 + $15.08 = $3,030.08. And so on and so forth.

This may not seem like a lot at first, but as the months go on, your balance goes up and you get more disbursements for more semesters and soon enough, the interest you are paying is snowballing!

What not to do!

When I went to college, my mom and grandma set up student loans for me AND parent loans.

I did a little bit of research on scholarships and got one through my dad’s work that provided a little bit of help each semester.

I also grew up in Florida and qualified for 75% Bright Futures which also paid a significant amount of my tuition and I somehow still graduated with $30,000 in debt!

Going to school was supposed to be “my job” so I was not allowed to work during college.

Now, I had a blast during my 4 years and I don’t regret anything except that I wasn’t smarter about finances while I was there.

I used my loan money for more than just my school expenses. I used my loan money for eating out, shopping, trips, etc.

Looking back, I wish I hadn’t done that because all of those things ended up costing me 10x or more than what I originally paid for them due to interest.

I now pay $225 on a biweekly basis (so $450 per month plus 2 extra payments throughout the year), and I increase that amount every year to try and pay my student loans off as soon as possible.

I used to think that getting a reduction in taxes for student loan interest was worth it, but I ultimately decided I would rather have that $450+ in my pocket every month.

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1. Apply for scholarships and/or grants! Do your research and apply for as many as possible. You never know! Maybe a certain scholarship doesn’t get many applicants and you are the best applicant! Both scholarships and grants are free money that does not have to be repaid. Even if it is for a few hundred dollars a semester, that is potentially thousands in interest you can save over the long run.

2. Check to see if your state offers a scholarship program like Florida’s Bright Futures. If you get good grades in high school you can qualify for a higher amount of support. When I went they gave 100% and 75% (maybe 50% too) depending on how good your grades were.

3. One that same thought, definitely look at schools within your home state. In-state tuition is pretty much always cheaper than out of state tuition.

4. Work a part-time job. Even if your parents want you to focus on school while you are in school, you can work a job during the summer and save all of the money you make to help pay for expenses while you are in school. Even better, work a part-time or summer job while you are in high school and save your money. I know it is difficult as a young person to save your money, but, trust me, you will be thankful you did in the long run.

5. Have a conversation with your parents while you are in high school to discuss how you are going to pay for college. Maybe they have set aside some money for your college tuition. This is super helpful for you to know so that you can plan accordingly.

6. Attend a community college for 2 years, then transfer to a University to complete your degree. Community colleges are a lot more affordable than 4-year universities and you save a lot of money, in the long run, going this route.

7. Live at home. If you attend a community college first, it usually is in the same area as where you grew up. If you can live at home to save money, do so. Living costs are a huge part of college expenses and if you can cut out even some of them then that is a huge help.

8. Save graduation money. When you graduate from high school, you may get some graduation money from your family or family friends. Save this money to put towards college expenses.

9. Attend school at a slower pace. If you have to work or want to work to pay for college, you could take fewer credits per semester. This will draw out your education some, but if you can pay for it as you go this will be a lot less burdensome on you in the long run.

10. If you are working, check to see if your employer has a tuition reimbursement program. A lot of employers these days have a tuition reimbursement program. If you want to get your degree in a field that is somewhat related to what you do for your company or something your company does in general, they may help pay for your tuition. (I know this is the case for graduate programs, but could be for undergraduate as well).

I know it may not be fun to think about all of this, or you just don’t want to think about all of this when you are in high school, or even before high school, but it is essential to think about and start planning for now!

You can save your future self thousands upon thousands of dollars!

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Resources to Make Extra Money for College NOW

Whenever I make a purchase online I make sure to check to find if the store offers cashback on any of the available websites.

Most stores online offer cashback at various percentages and those percentages change constantly. If you aren’t using a cashback site before making purchases you are leaving money on the table!

(Side note: don’t make purchases just for the sake of getting cashback. Make sure it is a purchase you absolutely need to make first. Then make sure you are getting the best cashback percentage!)

The 3 Cashback Sites I Find to Have the Highest Percentages and Use Consistently are:

1.Ebates/Rakuten: I think this one is the largest and most known cashback site. Right now, if you sign up here and make a $30 purchase at any store, you will earn $30 in cashback!*

2.Giving Assistant: this site is awesome because you can earn cashback or you can donate your earnings to a cause of your choice! You get $5 just for signing up here.*

3. Top Cashback: This is the last one that I use and I find it has some of the highest percentages payouts. You can use this link here to sign up.

*These offers change regularly. They are current as of the date of this post.

Work a Side Hustle

How to be an Instacart shopper

Work for Instacart, Ubereats, or any other delivery service to make extra cash to help pay for college.

I would have given anything to have this around when I was in college!

Read my in-depth review of what it is actually like to be an Instacart Shopper here!

You can sign up for Instacart here!

Make Money with Cashback Apps

I recently wrote reviews for both Ibotta and Fetch. Both of these cashback apps help you make money on purchases you are already making! Check them out and stop leaving money on the table!

I hope you enjoyed this post and don’t forget to check out my post about student loan refinancing with Earnest!

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