How to Manage Student Loans or Avoid Them Altogether

The first step toward conquering student debt is a family conversation about responsibilities and budgeting.

By and + More

The student loan statistics in the news are sobering. The cost of higher education is rising steeply, and borrowing seems to be the only way for many to obtain a college degree.

But with the job market still soft, and the costs of other necessities like health insurance and gas rising quickly too, a big student loan burden may not be in a new college graduate's best interest. Here are some ways to keep the loan numbers in check. 

JULIE:

As parents, we want our kids to have a good start in life, and beginning it with a large student loan debt is not often what we had in mind. Whatever your family's decision about student loans will be, the following steps can help manage it and make sure the decision is a well thought out one.

1. Talk to your kids about debt: College students are at a disadvantage when it comes to understanding what student loan debt will mean down the road. For many of them, a student loan is the first debt they will owe, and it's hard for them to visualize what that will mean when the borrowing phase is over and the repayment phase has begun.

[Figure out how much to borrow for college.]

As parents, we can and should explain to our kids what a long-term debt will require in terms of budgeting the payments and paying it back.

2. Prioritize your expenses: College expenses tend to fall into two major categories: education and experiences. Expenses that are tied directly to a college education include things like tuition, required fees, and books. Experience costs are the extras: living on campus, studying abroad, and being a member of a sorority or fraternity, for instance.

College experiences can be quite valuable, but you need to ask yourself if they're worth going into debt over. When trying to keep student loan debt to a minimum, focus on the education costs over experience costs.

[Find out how to save on personal expenses in college.]

Parents, this might be a good way to talk to your kids about college costs as well. If you're going to be splitting them you might suggest to your student that you'll pay for the education if he or she pays for the experiences.

3. Get a head start, no matter how small: If you look at the estimates for what college will cost and the professional recommendations for how much to save, it can be discouraging. It's easy to ask yourself, "Why bother?" But every dollar you save is a dollar you won't have to borrow. So even if you're getting a late start or the amounts you can put away are small, do it anyway.

LINDSEY:

My mom is the expert on student loan debt, because she and my dad are the ones who have enabled me to attend college without taking student loans. It is their frugality and forward thinking that is allowing us to pay cash for my education, but here are some smaller ways a student can help avoid student loans.

1. Choose an affordable school: Whether this means choosing the school with the lowest ticket price or the school with the most scholarship money, I believe it's the student's responsibility to be reasonable in the college they attend.

My mom and I write a lot about finding the balance between a school that excels in your course of study and a school that is a good value. I was lucky because, for me, the most affordable school also had a great journalism program. It's up to each student to find a healthy balance between cost and prestige (that hopefully will allow their family to escape with minimal or no loan debt).

[Consider 10 big and small ways to cut college costs.]

2. Cover as many smaller expenses as possible: Maybe it's not feasible for you as a student to pay your tuition or housing costs, but consider footing the bill for books, supplies, honor societies, and various fees.

I work a part-time job to cover my personal expenses, but I've saved my parents money by paying for my supplies for my journalism classes, dues for my honor society, and miscellaneous sorority fees. These types of expenses may be small, but alleviating your parents of these can be the difference between taking out student loans or graduating debt free.