Ultimate Guide for Helping College Students Overcome Student Debt

Millions of students across America are struggling to repay their student loan debt. Student debt ranks as the second-highest consumer debt category, with only mortgage debt higher. It’s also the fastest-growing segment of U.S. household debt, having grown nearly 157 percent over the past 11 years. It’s a trillion-dollar problem in the US, and it keeps growing.

For students who are considering postsecondary education — or have already taken on student loans to go to college — these facts can be daunting. Parents whose children are considering a college program may be feeling stressed by the financial burden postsecondary education may place on their children — or on themselves.

This guide aims to help students and parents prevent, manage, and overcome student debt. It also provides resources and suggestions on how universities can ease the burden for prospective and current students.
By the Numbers: The Student Debt Crisis in the U.S.

  • $1.5 trillion: The amount of student debt in the U.S.
  • 44 million: The number of borrowers in the U.S. with student loan debt
  • 2 million: The number of student loan borrowers with more than $100,000 in debt
  • 8 million: The number of borrowers under the age of 30 with student loan debt
  • $37,172: The average student loan debt for a student who graduated in 2016

For more statistics, visit Student Loan Hero.

What Students Should Know About Preventing or Managing Student Debt

With tuition for college close to all-time highs, it’s no surprise that more and more students are pursuing student loans in order to afford their higher education. And while it’s likely that most students will graduate with student debt, there are ways to ensure the burden doesn’t become too heavy to bear. Here are a few things prospective, current, and graduated students can do to ensure they’re taking on — and paying off — their student debt responsibly.

Before applying for college

  • Any post-secondary program will be costly. Are you sure you know what program you want to take? If not, consider a gap year, during which you can not only home in on your career goals but also save money.
  • File your FAFSA This is the first step in determining how much financial aid you may qualify for.
  • Do your research — on schools, programs, and financial aid. Before applying to a program, ensure that, should you be accepted, it makes financial sense.
  • Explore scholarships, work-study programs, and grants. The less money you have to borrow for school, the better.
  • Consider part-time school. Could you work part time while attending school part time? If so, this option could ease the financial burden of your education.

During school

  • Take steps to minimize other debt by developing and sticking to a tight budget. Live “like a student” while you’re in school so you won’t have to live like a student after you’ve graduated.
  • If possible, consider living with family members where rent could be free or reduced.
  • Consider any on-campus or part-time work. Of course, your classes should be your top priority, but any income you can gain during the school year or over the summer could go a long way toward keeping your expenses and debt in check.

After graduation

  • Research the right repayment option.
  • Ensure you understand your loans and their respective grace periods. Different loans will have different requirements.
  • If you can afford it, prepay. Any tax refunds or other “windfalls” should go toward your loans — and be sure to pay off the highest-interest loan first.

If you can’t make your loan payment, don’t ignore your loans. Federal Student Aid offers a few options for students who can’t make their payments:

  • Change your repayment date
  • Explore a different repayment plan
  • Consider consolidating your loans
  • Get a deferment or forbearance

Student loan forgiveness

To find out if you may be eligible for student loan forgiveness, visit the Federal Student Aid website.

For more information about researching student loans, visit Federal Student Aid.

How Parents Can Help Students Manage Debt;

Whether or not parents choose to help their children pay for school, there a few things they can do to ensure their children are set up for success by the time they enter a postsecondary program.

  • Talk with your children early. Once a child is in high school, it’s wise to open up the discussion about postsecondary options, including types of programs and the true financial cost of a degree or diploma.
  • Be open to an array of postsecondary opportunities. It may be exciting for parents to imagine their children attending an Ivy League school or even just an out-of-state program, but it’s important that parents and children have an honest and open conversation about realistic opportunities and objectives. Is there a comparable program closer to home that may be more affordable? Is living at home an option during college? Is a four-year degree necessary for the career the student is pursuing? Could a community college program or a trade school offer the same opportunities?
  • Encourage responsible saving. If their children have a part-time job in high school, parents can encourage or require them to put aside a part of their earnings to help pay for college. After all, it’s been proved that students who have a financial stake in their education are more likely to take their education seriously.

Parents who are looking to support their children financially through college may consider having a 529 plan in place and/or applying for a PLUS loan.

  • 529 plans, or “qualified tuition plans,” are designed to encourage saving for future education costs. There are two types of 529 plans, which the US Securities and Exchange Commission outlines here. 529 plans have certain tax benefits, depending on the state, the amount contributed, and the amount withdrawn.
  • Federal PLUS loans can be used by undergraduate and graduate students, as well as parents of dependent students, to help pay for college. It’s important to note that if a PLUS loan is assigned to a parent, that parent cannot pass the responsibility for loan repayment onto his or her student.

For more information about 529 plans, visit the U.S. SEC website here.

How Universities and Colleges Can Help Solve the Student Debt Crisis

The Institute for College Access and Success recommends a number of measures universities and colleges can take to help manage the student debt crisis and protect students from predatory lenders.

  • Require school certification of private loans. There are many differences between federal and private student loans; TICAS recommends that private lenders be required to confirm a borrower’s eligibility with his or her school before disbursing the loan. This measure would help ensure students are making informed borrowing decisions.
  • Increase access to federal student loans for community college students. According to TICAS, there are more than 100 million community college students who can’t get a federal loan because their schools do not participate in the federal loan program. Without access to federal loans, these students may need to explore private loans, which can have much higher interest rates, or make other risky financial decisions in order to afford their education.
  • Improve resources available for students to make informed financial decisions. Although students with federal loans are required to go through loan entrance counseling, TICAS suggests that more resources be available to students to ensure they fully understand how to make the best financial decision for their education.

For more information about the role colleges and universities can play in supporting students’ financial well-being, visit TICAS.


The student debt crisis doesn’t appear to be going away anytime soon. However, with the right preparation, research, and knowledge, students and parents can ensure they won’t be caught off guard by future debt.


Bankrate, “7 Surprising Ways to Minimize Student Debt”

CNBC, “11 Strategies to Avoid Student Loan Debt”

Consumer Reports, “How to Minimize Student Debt”

Equifax, “How to Talk to Your Kids About Student Loans”

Federal Student Aid, Avoiding Default

Federal Student Aid, How to Repay Your Loans

Federal Student Aid, My Direct Loan

Federal Student Aid, Types of Aid

FinAid, “Minimize Student Loan Debt!”

Institute for College Access & Success, “10 Student Loan Tips for Recent Graduates”

Institute for College Access & Success, “National Policy Agenda to Reduce the Burden of Student Debt”

NBC News, “Student loan debt: What Kids and Their Parents Need to Know”

Pew Research Center, “5 Facts About Student Loans”

Student Debt Relief, “How to Avoid Student Debt”

Student Loan Hero, “A Look at the Shocking Student Loan Debt Statistics for 2018”

U.S. Securities and Exchange Commission, “An Introduction to 529 Plans”