As of 2022, Americans owe more in college debt than ever before. There are 44.7 million people with outstanding student loan debt amounting to $1.71 trillion. However, many people don’t even explore ways to graduate college debt-free.
Approximately 70% of college students graduated with an average of $29,900 in student loan debt in 2019. Additionally, 14% of parents took out an average of ~ $37,100 in parent PLUS loans.
When you graduate with college debt, it results in 3-4 years of a setback in achieving financial freedom. Each month, a chunk of your paycheck will go to paying off student loans; this money could be invested instead if you graduate college debt-free. If you graduate college debt-free, you get to start fresh and have the freedom to start planning your path to financial freedom right away after college.
It is definitely not easy to graduate college debt-free; it is also not impossible. The hard work that you put into making this a reality will feel worth it when you realize you have put yourself years ahead of your peers with debt.
As a recent graduate, I would highly advise exploring ways to eliminate or at least minimize the student loans you take out. Here, I have listed the most effective ways to pay for college without taking out loans.
1. Scholarships
There are thousands of scholarships out there that you can apply to. Most of these scholarships go unclaimed year after year. It’s basically free money. There are so many different scholarships for so many different categories. No matter who you are, you will definitely find scholarships designed specifically for you.
You can find scholarships based on financial status, athletics, merit, socio-economic background, race, and anything else that you can think of. If you have any trait that makes you a minority, you can bet that there is a scholarship out there for you. Even if you are not a minority in any way, there are many scholarships that are open for all.
Applying for scholarships has been made extremely easy by so many amazing websites that list and provide a customized list of all the scholarships you qualify for. This makes your work cut out for you.
You can spend a couple of weeks during the summer before your senior year to hash out any essays you might need to write. You can then create a solid list of scholarships you need to apply to once the applications open up.
2. Go To Community College first
Forget all the preconceived notions you have about community colleges. Community colleges can provide top-notch education. You can transfer your community college credits to a 4-year university anyways. Once your credits are transferred, your transcript will just show that you earned your credits from the university.
The community college tuition is a fraction of the price of a 4-year university. During your one year at a community college, you can complete all your lower-level classes and General education classes. In the future, it won’t even matter that you went to a community college, as once your credits are transferred to a university; your bachelor’s degree will still have the 4-year university name on it.
I went to a community college for two semesters before transferring to a 4-year university. With the credits from AP courses, I was able to graduate college in 3 years with a Biomedical Engineering degree and graduated college debt-free. Attending a community college helped me immensely.
3. Negotiate Your Financial Aid
Did you know that you can actually negotiate your financial aid? Well yes, you should absolutely reach out to the school after you receive your acceptance letter.
The best strategy to negotiating financial aid is having some leverage. Apply to as many colleges as you can, even the ones that you are over-qualified for. Those colleges will give you good scholarships to convince you into attending.
You will have an upper hand when you try to negotiate with the university you actually want to attend. You can use good scholarship offers as leverage. Mention the financial aid packages from other schools and ask the school of your choice to match the package. This might not work for all schools, but no harm in trying. Don’t worry, they won’t rescind your offer if they are not able to offer you a better financial aid package.
What not to do during these negotiations is use the word “negotiate”. From financial aid office perspective, financial aid packages are objective and not subject to negotiation.
Another way to negotiate your financial aid is to appeal to the financial aid office that the circumstances taken into consideration when evaluating your needs weren’t the complete picture. For example, the 2019 finances are considered for the 2021-2022 financial aid award year. During 2019, there was no pandemic. Presenting any unaccounted circumstances of the pandemic as leverage will help you get a higher offer.
4. Choose An Affordable University
You should apply to a wide variety of schools, including local universities. The point is not to simply pick the school with the lowest tuition, but it is important to apply to a variety of schools. You never know how much the school will actually end up costing after financial aid.
Don’t hesitate from applying to prestigious universities such as Ivy-league universities if you are qualified to do so. These prominent universities actually have some of the most rigorous financial aid offerings. They want the best of the best students attending their institutions. They are willing to pay for it.
Once you get your acceptance letters, pick the school that has the best program for your area of interest and has the lowest tuition AFTER the financial aid offered to you. Decide on your affordability of the university after you factor in the financial aid.
5. Live Off-Campus
College dorms can be unreasonably expensive. They are one of the biggest expenses students face in college besides tuition. Living in a dorms only adds to the college debt you will incur. The best way to avoid paying costly dorm fees is to live off-campus.
I highly recommend finding an apartment near campus with roommates. You can save a significant amount of money doing this. You can use your earnings from a part-time college job to pay for your apartment rent. If saving money and graduating college debt-free is a high priority for you, it would be even better for you to live with your parents given that they live within a commutable distance from your school.
Yes, it is less convenient to live off-campus. However, the sacrifices you make will feel completely worth it when you graduate college debt-free. In the case of big university campuses, you may even find apartments that are closer to campus than dorms are.
I was able to find a apartment 2 minutes walk away from the library. It was a lot more convenient than many dorm houses on campus.
6. Fill Out Your FAFSA
Filling out your FAFSA is a must. Filling out your FAFSA early is even better. Remember, the earlier you apply the higher the chances of you getting better federal and university-offered financial aid. Even if you don’t think you will qualify for financial aid, it’s still a good idea to fill out the FAFSA.
The FAFSA application can be filled out starting October 1st. I suggest you fill it out ASAP. Some colleges have financial aid money to give out on a first come first serve basis. You want to be at the front of that line.
To share a personal experience, I forgot to fill out my FAFSA before my senior year; I submitted it in January instead of October as I always did. This mistake ended in me not receiving the $2500 merit scholarship that I used to receive every year from my university. This merit based scholarship required the FAFSA to be filled out before it could be awarded. They only have a limited number of merit based scholarships to award each year. I missed out. Laziness cost me dearly.
Even if you don’t qualify for need-based financial aid, filling out the FAFSA is essential. Many financial aid packages that are not need based (like athletics bases or merit based) still require that you have filled out the FAFSA. Anyways, it doesn’t hurt to fill it out even if you end up paying for tuition with all your own money.
7. Graduate Early
The best way to save tuition money is to reduce the number of semesters you attend college. A typical undergraduate college degree is expected to be completed in 4 years, but many students take as little as three years to complete.
Although you will still pay the cost per credit part of your tuition regardless of how many you take to finish your degree, there are many fix costs each semester. You will save one year worth of fix tuition costs, fees, and living expenses.
If you are a responsible and productive student, it is absolutely feasible for you to graduate college in 3 years instead of four. According to Forbes, You can save an average of $42,419 at a private university or $18,943 at a state university if you complete your degree in three years instead of four.
Alternatively, you can also take a whole year off before you graduate college to do a co-op or a full-time internship. If you are in the STEM field, these internships can pay as much as $50,000 a year. I completed my college courses in 3 years, but I took a year off right before my senior year to do a co-op. With the earned money, I was able to graduate college debt-free. Plus, I was able to save enough to pay for my living expenses while I looked for my first job after college.
8. Work Part-Time During College
In college, there are plenty of opportunities that make you money and help you pad up your resume with helpful experience.
Fortunately, it is much easier to balance work and school in college compared to high school. You can choose classes that you will allow you to create a schedule that effectively balances work and school. Look for a job that is likely to have down time. For example, if you are working at the library desk, you can just do your homework while you work or when things are slow.
I worked as an undergraduate research assistant in a lab; I used to just do homework while I would wait for experiments to be completed. My roommate worked as a tutor for the university, but nobody used to show up to ask for help so she would just do her homework during working hours and get paid.
Working part-time while in college may require some challenges and sacrifices, but it is totally worth it if it means graduating college debt-free.
9. Save Money during high school
You will find great comfort in having some savings before you even start college. From the time you are eligible to work, you can work through the summer vacations. If you are confident in your ability to not compromise your education, you should even work part-time during the school year.
You will be surprised how many high-paying summer jobs you can find even as a high school student with no experience. Ideally, you can find a freelancing job that has flexible hours and high pay.
The money you will earn won’t be enough to pay the entirety of college expenses, but you could surely earn enough to get through a semester or two.
I was able to pay for my first semester of college and the rent for my apartment for one year from the money I earned during high school. It is definitely difficult to manage a busy class schedule, and a part-time job, but it is completely doable.
At the end of four years, you will be much better off compared to your colleagues if you follow any one or more of above mentioned ways and graduate college deby-free.