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Ten Ways to Pay for College Without Going Into Debt

Written by Neal Frankle - 17 Comments

Ten Ways to Pay for College Without Going Into Debt

College is one of the best investments you can make – if it’s done right. If you or someone you support is getting ready to go to college, I have great news. You can go to college and graduate without being saddled with huge debts when it’s over.

The following advice is mainly going to help those with limited resources. If you’re in the fortunate situation of being wealthy and having unending financial support (even after you graduate), then the following post may not be very helpful to you. With that said, let’s dig in.

1. Be practical

College isn’t an extension of high school. If it were, they’d call it grades 13 through 16. But they don’t. They call it college. It’s very different than high school and you should approach it as such. The purpose of college is to learn something to help you make a living after you graduate and have a full life. It’s not play time.

So the first tip is, if you don’t know what you want to do after you graduate college, don’t spend a lot of money at college trying to find out. The last thing you want is to graduate and then have to deal with getting out of debt if you don’t know why you’re doing it. You can be just as confused at community college, and it’s a lot cheaper.

And you should also think seriously about picking a high-paying major. I know that it’s not very “PC” to say this, but it’s the truth. This doesn’t mean you shouldn’t study English, if that’s your choice. But if you decide to study in the Liberal Arts department, do it for a reason.

Do you want to be a writer or a lawyer? Great. Studying English might make sense. But I reiterate, if you don’t know what you want to do, don’t waste money on an expensive school. In fact, sometimes it pays to go to private career colleges rather than a 4 year school. This way you learn a trade and start making a living fast.

2. Stay close to home

If you don’t have the resources to go away to college, then don’t get into debt in order to buy that “college experience.” It’s not worth it. True, you won’t have the full on “living on your own” experience, but you will have the “living like an adult who doesn’t spend money he/she doesn’t have” experience. I think the latter will pay dividends far beyond the former.

3. Work it baby – maybe

You may be able to arrange your classes so that you can have a number of free days and you can earn some extra money during that time. This isn’t a bad idea, but you should really scrutinize this decision. If you work 20 hours per week and earn $10 per hour, that’s and extra $200 per week or $800 per month.

Depending on where you go to college, that could really go along way. But remember… There is a cost to working – and that’s time. Consider not working and taking extra units. If you could do that – and really dive into your studies – maybe you’d be able to graduate a semester or two early. And that means you’ll start earning more money sooner. That might be a better decision and if that’s the way you go, take courses during the summer too.

4. Get tuition assistance

Some employers will pay all or part of your college costs. Before shouldering the entire burden yourself, look into internship programs that offer these benefits.

5. Discover the benefits of community college

Even if your goal is to get a four year degree, you can and should take advantage of the community college system. General education classes will be cheaper, easier to get, and count for as much credit as they do at your four year school. If you really want to save, go to community college for all your general education courses for the first two years, and then transfer.

6. Apply for financial aid

Make sure to fill out the Free Application for Federal Student Aid (FAFSA). Depending on your situation, you may be qualify for some grants – or at least low interest loans. This system is based purely on financial need. This is my least favorite option, so please don’t get into debt if there is any way around it.

7. Never pay out-of-state tuition

If you have your heart set on going to an out-of-state school, move there and work for a year to establish residency. A client of mine sent his daughter to a school that charges $18,000 a year for in-state tuition, and double that for out-of-state tuition.

By having his daughter work for a year, she’ll be saving up money for college and she’ll be able to qualify for in state tuition too. That will save the family a total of $64,000 – not too shabby.

8. Slash housing costs

There are a number of ways to slash housing costs. The best thing to do is stay out of the dorms because they are the most expensive alternative there is. The food plans are expensive, too.

Live a mile or two off campus, buy a cookbook, and get a bike. You’ll save a tremendous amount of money on housing and food, and you’ll also forgo the need to join a gym. You’ll get all the exercise you need peddling back and forth to school.

9. Textbooks

Don’t buy new text books. Period. Buy used or rent.

10. Don’t be a snob

Other than in very unique circumstances, it doesn’t matter where you get your undergraduate degree. What you get out of college will be in direct proportion to what you put into it. And keep in mind that very few people work in the same field that they studied in undergraduate school. So don’t don’t get all excited about it and think the school you go to is the most important decision you’ll ever make – it isn’t.

My neighbor’s boys went to a very prestigious school in Boston and each graduated with $150k in debt. Of course, that was after they cleaned out their parent’s home equity and retirement accounts. They’re now working at nice jobs in the music business, which is what they studied. But they are working along side graduates from local four year schools. In their case, the fancy price tab only set them back, it didn’t help them in any way.

I hear story after story like this and I’m sure you do too. Don’t fall for the fancy snob stories about all the benefits of going to an expensive college for undergraduate work. It just isn’t worth it. I’ll even go one step further. My child got accepted to that same fancy school in Boston, but we talked it through and we decided as a family that the price wasn’t worth it.

Instead, she’s going to a four year state college and getting a much better education. How? She’s gotten super involved with the honors programs on campus and she’s rubbing elbows with the best and the brightest the campus has to offer.

Bonus Tip #11 – Remember who the boss is

If you’re paying for your daughter or son’s education, you get to decide how much to spend. I see far too many people who pay for the school their child gets accepted to as if it’s their responsibility to do so. Don’t fall for it. Since when did it become your reasonability to do that? Regardless of what you dreamed of (or what your child envisions for his or her college experience), there are economic realities and they must be considered.

Published on April 7th, 2011
Modified on April 5th, 2012 - 17 Comments
Filed under: Education

About the author: is a Certified Financial Planner in Los Angeles whose goal is to help people improve their finances and find balance in life. He covers these topics at his personal blog Wealth Pilgrim.

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17 Responses to “Ten Ways to Pay for College Without Going Into Debt”

  1. 1
    Donna Says:

    International and out-of-state students attending our university in NY apply for NYS residency after the end of their first semester. Students don’t have to be employed either.

  2. 2
    DIY Investor Says:

    Great post. Many would benefit from reading your observations.

  3. 3
    cee Says:

    Your last tip made me do a double take: “I see far too many people who pay for the school their child gets accepted to as if it’s their responsibility to do so”

    It is a parent’s responsibility to raise a well adjusted child and yes that includes paying for a good education so they can be upstanding and productive members of society. If you refuse to help out your child especially if you have the means to do so, don’t go crying when you get stuck in a medicare paid for retirement home because s/he is too busy with the responsibility of paying for debt that got accumulated during teenage years. An 18 year old is NOT a fully formed adult!

  4. 4
    Mike B. Says:

    @cee – There are many points of view here — be charitable to some of the ones other than your own.

    My parents approached college as it being my job to contribute, and their job to cover the difference, small or large. I wound up making the difference quite small, as it turned out.

    I’m approaching college saving from the opposite perspective — we will be giving each child a roughly similar amount of money, and it’s their job to use it wisely and make up the difference, whether that’s through work, loans, or scholarships. The child who employs Nickel’s cost-cutting suggestions will be off to a head-start.

    It’s a difficult balance — yes, helping your child get a good education is part of being a good parent. On the other hand, part of that good education is learning that not everything will be handed to them for the asking — they have to work for what they want, and it will cost them something.

    How much to give, and how much to let them achieve on their own is a very individual parenting decision.

  5. 5
    Nickel Says:

    cee: I don’t think Neal is saying to not help your kids, but rather that you shouldn’t feel obligated to foot the bill regardless of where they choose to go. If you can’t afford an Ivy League education, then you shouldn’t feel obligated to take out a second mortgage and/or raid your retirement accounts to make it happen. You can still help, but you and your kids should sit down and have a talk about what you guys can actually afford.

  6. 6
    jim Says:

    #7. Qualifying for in state tuition isn’t necessarily that easy as just living in state for 1 year. If you are financially dependent on your parents and your parents are out of state then you proably won’t qualify.
    You may need :
    - 1 year residency
    - dependency on a state resident or financial independence
    - primary purpose in state is not attending college
    - nature and source of finances

    Living in state for a year is the easy part. The other 3 bullets are not so easy.

  7. 7
    The Dividend Pig Says:

    I think my father nailed the best way to pay for college tuition. He gave me all the money he saved, and he said, “Son, this is have much you have. You are required to get a four year degree with it. How much you pay, well, that’s up to you.” So I had my choice: expensive out of state, or community, then a state school, and the rest of the money was mine, to travel, party, whatever. It taught me a lot.

  8. 8
    Neal Says:

    Nickel, that’s exactly what I was trying to say. Thanks.

  9. 9
    E.C. Says:

    I agree with tip #3 with caveats. There needs to be a balance between working and developing the type of resume, in terms of academic accomplishment, leadership activities, service, etc,that make someone competitive for jobs or graduate school. For some students, working 20 hours a week may be fine,but others may have to sacrifice important aspects of their education. For me, doing paid internships in my field during the summers before my junior and seniors years, and taking on a couple of hours of tutoring a week during the school year to pay for groceries worked out well.

    I agree strenuously with tip #10. Seven years ago when I was a high school senior, I was pretty disappointed that I didn’t get to go to the prestigious college of my dreams that remained financially out of reach despite sizable scholarships. Now, I’m very glad that I went to the state university on full scholarship and took advantage of its honors college.

    Financially, it was a great decision because it allowed me to graduate debt free, build savings while in school, and not depend on my parents for funds. Academically, the vast majority of the courses I took proved both challenging and exciting, and I had the opportunity to become involved in undergraduate research that I found absolutely fascinating. Personally, I was glad to be living close to home and be able to help out with some challenges my family was facing. Professionally, so far I’m on track to do everything I aspire to professionally. I served in Teach For America, and this fall I’ll be heading off to a Ph.D. program at a top 10 school in my field, with a fellowship to pay for it. Going to a decidedly non-prestigious state school was one of the best decisions in my life, even though it wasn’t really my decision.

  10. 10
    Dr Dean Says:

    I think college financial aid offices should be required to give “truth in lending” statements-that tell students the average salary of their chosen major and how long it might take to pay the money back.

    This might make them think before borrowing 150K for an English degree…

  11. 11
    Deb Says:

    “out-of-state students attending our university in NY apply for NYS residency after the end of their first semester.”

    I would be interested in knowing what university this is.

  12. 12
    Accolay Says:

    #5. My college experience has taught me that community college is the absolute best thing you can do if you don’t know what you want to do. It’s almost half the cost of going to a University.

    #3. At least in my field, many recruiters are looking for applicant with experience at least in lower levels, which means carrying a job. It doesn’t have to be 20 hours a week, but having a little experience can put you far ahead of other applicants.

    #8. Living off campus has saved me thousands of dollars.

    #9. I’d add that you can also sometimes get away with borrowing text books from the library, studying with the reserve copy of the text in the library or getting them via inter-library loan. Sometimes you have to pick and choose what you are going to buy because you might really need the new book or you can make due with the last edition etc.

    If you really don’t know what you’re going to do, consider joining the military. Not everyone in the military will be pounding boots in Afghanistan (depends on job and branch, but I digress). The GI Bill is a terrific benefit: full time tuition/fees paid in full, a monthly stipend for living expenses (mine is close to 1.5k per month during the semester) and $1000 per year for books and supplies deposited directly in your bank account (all tax free).

  13. 13
    Chelsea Says:

    In response to #11, don’t force your kid to go somewhere they don’t want to. Just tell them how much you’re giving them for college and say that they can come up with the rest if they want to go somewhere else. Or don’t pay for it at all. Tell them this early on in high school so that they’ll be more motivated to get scholarships. They’re adults now and are responsible for themselves. I’ll be a little more than $25k in debt by the time I graduate, but I’m proud of myself because I did it all on my own, and didn’t force my parents into any more debt for my sake.

  14. 14
    Bryannb Says:

    Most of what you say under “Be Practical” is refuted in your statement…. “And keep in mind that very few people work in the same field that they studied in undergraduate school.”

    I would also ponder the validity of advising a student to work for a year to obtain residency in the desired state because they can save money for college at the same time…VERY unlikely as they must be financially independent for that year and would no doubt spend every dime they make just to live.

  15. 15
    better business bureau california number Says:

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  16. 16
    lll Says:

    The parts where it says “Never pay for out of state tuition” is so true. However, you don’t need to establish residency in order to pay in state. Colleges and universities in border states (states next to each other) offer in state tuition to out of state students in states next to them. There’s also reciprocity (hope i spelled that right) fees from colleges that live in certain states (more than in-state, way less than out of state).

    It’s important to check with each public college to see what they offer. It’s usually listed under “tuition/fees” or “net cost calculator.” That’s a way to experience out of state at an in-state cost without skipping a year to do so.
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  17. 17
    Paul Fullerton Says:

    Why not do one year at a community collage to see what kind of student you are. Then transfers to a four year school if you are happy. The trick is to make sure that all credits are all transfrable to the four year school of your choice.

    To the parents who are cosigning the student loans make sure your student waives the right not to disclose his grades to you. If you don’t you can not see the grades unless your student shows you.

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