If you do not think you are ready for a serious relationship and do not want to hang out with a girl all the time how do you tell her?
You are to be commended for being one of the good guys and actually are very considerate of this girls feelings. Thanks!
You always have to be true to yourself and obviously you aren't ready for a committment at this time. Go for a leisurely walk somewhere and tell her the truth. Here is something to start out with:
"I think the world of you, but I'm just not ready to settle down to a one-on-one relationship yet. I have hopes and dreams I want to accomplish and I'm just not ready to commit to anyone. I wanted to tell you because I respect you."
There is absolutely no way you can tell this young woman any other way and not hurt her feelings, but she will get over it. Perhaps when you aren't around each other so much you may even find you actually miss her.