How to Avoid College Debt

It is estimated that college costs rise at a rate of 5% to 8% annually. With inflation only rising at a rate of 2% to 3% anually, families and students are finding it more difficult to close the gap on paying for college. Take a look at the following statistics:

• The average 4 year public university costs $17,336 per year.
• The average out-of-state student pays $27,791 per year to attend a public university.
• The average 4 year private university costs $35,374 per year.
• College students graduate with an average of $19,000 in student loan debt.

These figures don't even take into account transportation, outings, and other expenses which might be incurred for entertainment etc. With college tuition, room and board, transportation, and entertainment costs sky-rocketing it seems that the outlook for the students of the future is dismal. However, with a little work and some smart thinking college students and their families can actually cut these costs down, and possibly eliminate them altogether with these 10 Debt Avoidance Tips.

Community colleges are schools which allow students to earn a two-year degree and then transfer out to another school for their bachelor's degree. Community colleges are generally run by the state university system, and offer discounts to students who live in the county that the school is located in. Community colleges are a great way to save on college costs because the average price of a community college can be up to $7,000 less than that of a public/state university. Most community colleges can also garuntee entrance into the public/state schools around which they are located. So, if you don't mind staying close to home and around your family for just two more years - a community college can easily knock from $4,000 to $7,000 per year of of college costs.

High school students who graduate with good grades can get some phenomenal scholarships going into college. Students who graduate high school with a 3.3 or better generally receive from $1500 to $8000 off of their school bill each year. If a student graduate high school with mediocre grades and did not receive an academic scholarship, the student may still be eligible for merit (good grades) based scholarships based on performance in college. When it comes to grades - hard work could pay off big time and amount to over $25,000 in savings during a four-year bachelor's degree.

Another great way to pick up some money for college, is by way of winning scholarships. There are many options out there, but most are fairly competetive. The first place to look for a scholarship is locally. Many Elk's Lodges, American Legions, Kalurah Shrines, and the like have scholarship contests open to the public. If the student has a job, it is worthwhile to check into any scholarship programs that the employer might offer. In addition to local scholarships, there are also thousands of scholarships available on an national level from different associations and companies. There are a number of websites that compile these national scholarships for the student, and offer direct links to applications and guidelines.

FAFSA is the Free Application for Federal Student Aid. Most college mandate that FAFSA forms are filled out in order to give students their financial aid packages. The parents of the student fill out a FAFSA form with various information on annual earnings and tax reports, and the government calculates how much free grant money and how much loan money the student is eligible for.

Be careful as you are filling out the FAFSA form - especially online. There are scams out there that will make it look like the FAFSA is being filled out, but then they make you pay to submit it - or just use it to harves your information. FAFSA has FREE in it's name - so if it isn't free - then don't fill it out. Also, make sure that the website you use to fill out the FAFSA is a .gov - because only the U.S. government can make .gov websites.

Upromise is a website where students and their families can save for college by doing things they already do like buy certain products when grocery shopping, buy gas at certain gas stations, eating out, and shopping online. It is possible to earn between 1% to 15% rebates on items that would be purchased on regular trips to the grocery store. Money accrued through Upromise can be put toward a 529 Savings Investment Plan or can be linked to any Sallie Mae school loan accounts. Some families have saved an extra $50 to $1000 per year using Upromise!

Many colleges offer a variet of work-study programs where the student can take the money they earn from their on-campus job and apply it directly toward their tuition. If all of the on-campus jobs are takin, the student should look for one off campus if their schedule allows. However, the student should understand that an off campus job will be less tolerant and flexible to the needs of the student, whereas the university will understand that the student has obligations to study and can accomodate the student accordlingly.

Inevitably, most college students will have to take out at least one loan to help them with their tuition. Get creative with the loan search. Shop around to try and get the best rate. If the amount that must be borrowed is less than $3000 consider putting it on a 0% interest credit card and pay it off as soon as possible. Richard Branson's Virgin Company has a cool website called Virgin Money. Virgin Money will allow family members to loan their student money through an online portal at 3% interest (much less than the standared 6% student loan rate) and because the money is collected and disbursed by Virgin,the family members are assured that the borrower will not default.

If possible, get a syllabus or book list as soon as they are available. Buying books at college book stores is a rip-off. The bookstores majorly overcharge. Getting a book list or syllabus ahead of time can allow the student to shop around for the best price on books at websites like amazon or an other various college textbook suppliers. Students should also look to other students for books. Students can check the various bulletin boards around campus for used book advertisements. Buying used books from other students can save 50% or even more from the original price of the book. Once the semester is over, go ahead and sell any unneeded books and put that money towards books for the next semester.

While it is fun to go out to eat, shop, and go to the movies, it can get expensive. Students can take advantage of on campus activities (which usually provide some form of refreshment). On campus activities are frequently free (covered in the cost of tuition) or if not, only carry a nominal ($1 - $5) charge - much less than the $11 to $12 it costs for a movie ticket these days.

Credit card companies highly target new college students to sign-up for credit cards. For college students, it sounds like a sweet deal. Get stuff - and don't pay for it right away. However, the average college student with a credit card is carrying $2200 in credit card debt. That is $2200 in addition to the average of $20,000 per year that college will cost. College students need to realize that they really cannot afford to carry credit cards - or they need to learn how to use them responsibly. Most students carry them with the intention of "building credit", but $2200 doesn't say "building credit" it says "I am an irresponsible college student digging myself deep into debt!" If the student must use a credit card - they should pay it off in full each month to avoid unnecessary loss of money on interest charges and late fees.