For a lucky few, their parents made the decision with them, highlighting the pitfalls of taking on too much debt, or nudging them towards cheaper in-state programs.

Etinosa Agbonlahor

The average American student graduates with $32,731 in student loans. Unlike other countries where student loans have low interest rates or deferred repayments until the borrower is earning a comfortable income, student loans in America can carry interest rates as high as 14% and have a short grace period before loan repayments are due.

In addition to saddling young people (most graduate at 22) with more debt than they'll earn in their first year out of college, student loans have major implications for our finances. People with large amounts of student debt are more likely to hold off on investing, be more risk-averse, and put off homeownership. Carrying large amounts of student debt essentially robs people of time, money and peace of mind.

The way we talk about student loans often makes it seem as though everybody has debt. Indeed, Student Loan Hero suggests that in the class of 2019, an incredible 69% of college students took out student loans, and they graduated with an average debt of $29,000! Yet, a lot of people attend college
and graduatewithout taking on any debt.

I analysed verbatim comments from 212 women (18+) on how they were able to attend college without debt, and outside of the 'how', I was interested in the 'why'. What struck me most was that a lot of people made intentional decisions about how they wanted to fund their education. For a lucky few, their parents made the decision with them, highlighting the pitfalls of taking on too much debt, or nudging them towards cheaper in-state programs. Many others had seen older siblings or even co-workers at their part-time jobs struggle with debt, and independently made the decision to explore as many options as possible to fund their education without using loans.

Here's how most people avoided student loans:

1. Scholarships: Many women (36%) had full or partial scholarships which covered their tuition. Most highlighted that there are often local state/ city scholarships that many people don't know about. Others traded prestigious programs for lesser-known schools that offered them a better scholarship package. While some coupled scholarships with working part-time, others used 0% interest credit cards to cover minor expenses and then worked to pay them off each month.

2. Working: 30% of women put themselves through college by working part-time at the same time. Of course, most people who worked to pay for college also went to more affordable schools. For example, when I attended the City of New York-Hunter College, tuition was under $3,500 each semester with a full course load. A friend at NYU paid many times that. Overall, about the same number of people were able to fund college by working part-time, as got scholarships.

3. Family Help: 11% of women had parents who were able to pay for their education either through 529 College Savings Plan accounts or directly. A few had relatives who paid for college as a gift or spouses who supported them through college. Those who had help from their partners often had a reciprocal arrangement (some had already supported their partners through a degree, or planned to support their partners degree after getting theirs).

4. Attending a State School or Community College: A fair amount chose the option of either attending a school where they could qualify for in-state tuition, while others attended a community college for 2 years and then transferred to a 4-year program. This is an option that should be explored more often. While state schools won’t have the bells and whistles of more prestigious private schools, and certainly may not come with access to the same networks, their curriculums and teaching are often as good as private universities.

5. Military: Finally, an extra 10% served in branches of the military and took advantage of the GI bill which provides educational assistance to servicemembers, veterans, and their dependents.

6. CLEP: CLEP refers to The College Level Examination Program which is a group of standardized tests created and administered by the College Board. These tests assess college-level knowledge in thirty-six subject areas and provide a way to earn college credits without taking college courses. A few people took the CLEP to catch up on college credits and shortened the amount of time they spent in college as a result.

Overall, attending college without student loans seems to be possible—even when we overlook people who had help from their families. The most feasible options being attending an in-state school with more affordable tuition, taking the CLEP and applying for a range of scholarships offered both from the school you're applying to, but also from your state and special interest bodies you may qualify for. Regardless of which options you combine, it's worth reiterating that a significant number of respondents made the decision on how to fund their education, intentionally. They (or their parents) started thinking early about the options available to them to keep college affordable and made decisions with the ultimate goal of avoiding student debt, in mind.