9 extreme ways to avoid college loan debt

CNBC staff

Fun with college funding

Image Source | Getty Images

Ah, spring. The season where high school seniors commit to a university—and its price tag. Four years of experimentation, excitement and all-night study sessions may ultimately provide a financial nightmare to go along with the diploma.

Is there any way to escape that tuition bill? CNBC complied some out-of-the-box college-funding ideas.

The cost of college is about $42,000 annually for four-year private institutions, according to the College Board. There are state universities, community colleges and online programs to help lower the overall cost of higher education.

Then there's always financial aid, various grants and, of course, plenty of student loans to be had. In fact, Americans hold $1.3 trillion in outstanding student loan debt, according to the St. Louis Federal Reserve's fourth-quarter 2014 data.

Not for you? Here are some alternatives to that student loan burden. But be warned: Some of these ideas are extreme. Do not try them at home—at least, not without a sense of humor (mixed with fear about just how high your student loan debt burden could be in the future.)

By Roy Luo and CNBC staff
Updated 21 April 2015

Make an emancipation declaration

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The federal government assumes that parents will support their kids through college, so they look at parents' tax information, filed through the Free Application for Federal Student Aid (FAFSA), in order to determine how much financial aid a student needs. But an exception is made if a student meets one of 10 different criteria and is considered "independent" on the FAFSA.

Independent students give their own tax information to the government instead and, as a result, usually qualify for much more financial aid than dependent students who receive parental support. One such criterion for qualifying for FAFSA independence is being (or having been) an emancipated minor.

Emancipation laws vary state by state, but almost all involve a stringent process where the minor must prove that there's good reason to leave home. All this has to happen before age 18, the age of legal adulthood, so this option's success rate is slim but not nonexistent.

Get hitched (and marry down)

The ultimate Wedding Crashers.
Source: The Wedding Crashers | Facebook

Another criterion for "independence" on the FAFSA is marriage. If students are married on or before the day that they submit their FAFSA, they can claim financial independence. The government will look at the combined tax information of the couple in order to determine need, so the poorer the couple is, the more likely they are to receive additional financial aid. A Las Vegas or city hall chapel beckons, and it wouldn't hurt to get hitched to someone who already has a lot of debt and little income (at least, when it comes to the FAFSA).

Join the military

U.S. Army soldiers dismount from their Humvee after getting stuck in a mud hole in Kirkuk, Iraq, 2006.
Source: U.S. Armed Forces

Aside from the GI Bill, which offers to cover anywhere from 40 percent to 100 percent of your college tuition and some housing expenses based on length of active duty, the armed forces offer a myriad of financial-aid opportunities, ranging from Reserve Officer Training Corps (ROTC) scholarships to interest-rate caps on student loans. In addition, service in the armed forces is also another criterion for "independence" on the FAFSA. However, military work has its obvious risks, and the financial aid that comes with service often has military-related strings attached.

Welcome the welfare state

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Although college students were never traditional targets for food stamps, now known as Supplemental Nutrition and Assistance Program (or SNAP), program reforms have made it much easier for the young, studious and hungry to qualify. Requirements for SNAP benefits may vary slightly from state to state, but a student can generally get SNAP if they have a work-study job or work 20 hours per week on average.

Some colleges, such as Portland State University, are even encouraging their students to apply for SNAP money, which amounts to around $200 a month for groceries and food. Just a warning, though: SNAP doesn't allow for any alcohol purchases with federal money.

Crowdfund your tuition

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Treat your education like a start-up. That's the idea behind companies such as Pave and Lumni, which allow students to solicit cash loans from angel investors. Repayment occurs as a percentage of future salary over a set time window, so the more you make after you graduate, the more you pay back. It may only replace one type of loan with another, but experts said it's a more flexible loan than fixed repayments on traditional student loans.

Sell your genetic material

Source: Christie's

Adam exchanged his innocence for knowledge, Faust peddled his soul for worldly pleasures, and you can sell your genetic material for cold, hard cash. An average sperm donor can make "as much as $1,500 per month," according to the California Cryobank, a sperm bank in operation since 1977.

That said, the screening process for sperm donors is very selective: Some sperm banks accept fewer than 1 percent of applicants. For female college students, egg donation pays more—up to $10,000—but the donor is subject to a number of injected medications, hormone therapy and an invasive surgical procedure.

Become homeless

A homeless man sleeps on a park bench in the Brooklyn borough of New York.
Getty Images

Tired of paying rent or student housing fees? Just live from your car, school library or friend's couch. The option of homelessness is particularly attractive for New York University students, some of whom have used its Bobst Library as a temporary dorm when the Manhattan housing market isn't working in their favor. At schools where it's more economically and logistically viable to have a car, rent can be reduced down to just the price of gas and the potential social stigma that accompanies a destitute lifestyle.

Be someone's “sugar baby”

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There are more than 3.6 million men registered on dating website as "sugar daddies," otherwise known as older, wealthier men who don't mind dropping a pretty penny for companionship from younger, cash-strapped college girls. The website's CEO, Brandon Wade, said a female undergraduate can expect to receive, on average, $3,000 monthly for becoming a "sugar baby."

Reimagine the semester abroad

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There's no doubt that higher education costs in the U.S. are prohibitively expensive, but the issue becomes especially grave when American tuition rates are compared with those abroad. The OECD reports in 2013 that the U.S. is second only to Chile in annual average tuition cost.

It's at least worth a look at a few applications for schools overseas. For instance, tuition is free to international students in Germany, as of last year.