Originally published on LinkedIn as part of the LinkedIn’s Avoid Student Debt Series. By Robyn Shulman, 2016.

Avoiding Student Loan Debt: Practical Strategies for Parents and Students

I grew up in an underprivileged environment and learned early how finances shape opportunity. By age 12 I was working after school scooping ice cream and baking Cinnabons; at 17 I waited tables at TGI Friday’s to help pay for college. I started at a junior college and later completed a teaching certificate at a four-year university in Chicago. Hard work, careful planning and the right job made higher education possible for me even before the internet made financial information instantly available.

Today’s Opportunity: Information and Resources at Your Fingertips

Now, students and parents can access a vast amount of financial information online. The keys to avoiding excessive debt are financial education, focused research, prioritizing opportunities that save money and taking consistent action. Billions in grants and scholarships go unclaimed each year — but families can change that by being proactive.

Start Early: Financial Education for Parents and Children

Parents play a vital role in shaping financial habits. Teaching money management should begin in early childhood through modeling and routine experiences: grocery shopping, using coupons, distinguishing needs from wants, and involving children in budgeting decisions. Play activities like pretend currency and shopping games teach basic value concepts in primary years. As children mature, parents should discuss living within means, saving, and decision-making around college costs.

Without early financial guidance, young adults often struggle to budget, save or understand loan terms, which increases the risk of heavy debt. Early education gives students the tools to make wiser college choices and avoid financial hardship later on.

Hard Numbers: Why Action Matters

Student loan debt in the United States has grown into a severe financial burden. Key facts include:

• Student loan debt currently totals approximately $1.32 trillion.
• About 43.3 million Americans carry student loan debt.
• Student loan delinquency is around 11.6%.

Some alarming realities to note:

• Americans now owe more in student loans than credit card debt.
• Roughly 65% of high-debt borrowers reported not understanding loan terms when they signed.
• The U.S. government has the authority to garnish wages and withhold tax refunds to satisfy unpaid student loans — and only about 28% of borrowers know this.
• In some cases, outstanding student loan debt may be passed to family members if a borrower dies.

Take Action Now: Practical Steps to Reduce College Costs

Although these statistics are intimidating, many practical strategies and resources exist to avoid or reduce student debt. Students and parents who research, organize, and complete required paperwork will often find financial rewards that far outweigh the time invested.

FAFSA: Don’t Leave Money on the Table

The Free Application for Federal Student Aid (FAFSA) is the gateway to federal, state and many college-based financial aid programs. Many eligible students fail to complete it: recent studies show billions in federal grant money went unused because families did not apply. Completing the FAFSA is often the simplest first step in accessing “free” aid like Pell Grants.

Check Employer Benefits

Parents should review their workplace benefits through human resources—many employers offer scholarships or tuition assistance for employees’ children. Students should also ask their own employers about tuition assistance, grants, or tuition-reimbursement programs, especially if they plan to stay with the employer after graduation.

Government Grants and Scholarships

Grants and scholarships—sometimes called “gift aid”—do not need to be repaid. They can come from federal or state government, colleges, or private and nonprofit organizations. Four common federal grant types include:

• Federal Pell Grants
• Federal Supplemental Educational Opportunity Grants (FSEOG)
• Teacher Education Assistance for College and Higher Education (TEACH) Grants
• Iraq and Afghanistan Service Grants (for certain military-connected students)

Dual Enrollment Pell Grant

A federal experiment expanded access to Pell Grants for eligible high school students taking college-credit courses through participating postsecondary institutions. Dual enrollment can allow motivated high school students—especially those from lower-income backgrounds—to access college funds and reduce future costs.

Targeted Scholarships: Boren and Merit Awards

Programs like Boren Scholarships fund undergraduate study of less commonly taught languages and regions important to national security, in exchange for a post-graduation federal service commitment. Merit awards and automatic tuition scholarships also exist for qualifying students at specific universities.

Crowdfunding and Alternative Options

Higher-education crowdfunding platforms have emerged where students raise money for tuition, seek sponsors, and connect with mentors. Sites vary in structure and fees, so families should research which platform best fits their needs.

Company Education Programs: Examples of Generous Benefits

Some employers offer substantial tuition assistance and flexible education programs. Examples include:

• United Technologies (Employee Scholar Program) — thousands of employees have earned degrees through company-supported programs.
• Dick’s Drive-In — offers significant education benefits for employees, viewing itself as a transitional employer.
• Starbucks — expanded its program to cover four years of tuition for eligible employees through a university partnership.
• Fiat Chrysler — provides education offerings for employees, their spouses and children.
• UPS — longstanding Earn and Learn programs that offer generous tuition benefits, including for part-time employees.

Slow Down and Plan

Adults often make quick purchases and accumulate debt by living beyond their means. We can slow the debt clock by teaching children financial literacy, researching college costs thoroughly, and making deliberate choices about education financing. Thoughtful planning can reduce financial strain and contribute to a more stable economy and an educated society.

If you’ve successfully navigated the student loan process and avoided heavy debt, consider sharing your story and resources to help others.

Sources

Sources referenced for this article include: Student Loan Hero; Millennial Money Man; Boren Scholarships; College Confidential; EdNews Daily; U.S. News Best College Rankings; Brass Media – The Money Side of Life; College Board; NerdScholar.