It is possible to graduate debt-free

Rebekah Bell: It's Possible to Graduate Debt-Free. Here's How

Scout out scholarships, take courses online, use your skills to make money and get a summer job.

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By REBEKAH BELL

In 2009, when I was applying to my dream college, my parents had one stipulation: graduate without debt. I burst out laughing.

There was no feasible way that a middle-class 19-year-old with average grades could attend a college with a price tag of nearly $40,000 a year without taking out loans. But now that I've graduated loan-free, I realize how lucky I am that my parents made this seemingly ridiculous demand.

Figures from the Federal Reserve Bank of New York reveal that 37 million Americans have student loan debt. About two-thirds of students receiving bachelor's degrees borrow to fund their education, with the average student debt at an all-time high of $26,000. Total student-loan debt is estimated to be $1 trillion.

Only 38% of borrowers are making payments on their loans. The rest are either still in school, postponing payments or not paying them back. Almost one in 10 students who started repayment in 2009 defaulted within two years. At least 40% of student borrowers put off a major purchase such as a car or home because they couldn't afford it, and many are delaying marriage and families.

The lesson here is that students should do everything within their power to avoid this kind of debt. Although attending school without loans is difficult, it is not impossible. Here's what I learned about avoiding the debt trap:

• Think creatively. I attended a college close to home during my freshman year because it offered a scholarship. I also took classes online to save money. Some of my friends completed dual-enrollment classes during high school, got college credits from the College-Level Examination Program in subjects where they were already proficient, or attended a less expensive community college before moving to a four-year school. Others attended trade or vocational schools instead of college. The aim should always be: Reduce the number of credits you're paying for at the premium rate.

• Look hard for scholarships. I received an academic scholarship and need-based aid through my university. I also received several community and church scholarships and a matching grant through my father's workplace. Searching for scholarships and aid is tiring but can definitely pay off.

• Use your skills. Figure out a way to use your college interests to earn extra money—and to beef up your résumé and gain real-world experience. I competed on my university's speech team and worked as a videographer for the college newspaper in exchange for several thousand dollars' worth of scholarship money. Some of my friends received athletic or theater scholarships. A friend who was an English major worked in the on-campus tutoring center.

• Generate income. There are creative ways to make money. For me, it meant raising and selling cattle (one of the perks of being raised as a 4-H kid on a farm). One friend became a wedding photographer, earning cash and working only on weekends. My older sister taught piano lessons. A tech-savvy friend did Web design. These were all jobs that brought in money without interfering with classes.

• Make the most of summers. I worked full-time but also spent time interning for film companies. Some of my friends found paid internships during the summer, worked at camps, or took classes at community college for a fraction of the cost. One friend who did this was able to graduate a semester early, thereby saving several thousand dollars on tuition.

• Live frugally. I had a 10-meal per week plan and bought groceries for the rest of my meals. I also lived in a less expensive dorm and had two roommates instead of one, which saved money on room and board. Figure out simple ways to save money. Even if it's only $20 or $30 a month, it adds up over a year.

More than one financial-aid counselor told me it would be impossible to graduate debt-free. It often seemed like the naysayers were right. But persistence helped me pull it off. And even if I had fallen short, I still would have had to borrow much less than the average student. I may not have had as much free time as some classmates, but I enjoyed a rich and fulfilling college experience while also graduating debt-free. Graduating without debt means that now I can apply for jobs that I really want—instead of feeling like I have to grab the first one that will help me start paying off a student loan. Today, I'm indebted only to my parents for being so unreasonable.

Ms. Bell, a freelance writer, graduated from Biola University in La Mirada, Calif.

A version of this article appeared July 24, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: It's Possible to Graduate Debt-Free. Here's How.