Education

Students: How to Finish College with No Debt

This is a guest article by Wayne Lee.  If you are interested in contributing to Debt RoundUp, please follow our guidelines.

Millions of Americans graduate college owing tens of thousands of dollars in student loan debt, and some owe considerably more than that. For many students, this is debt that will take them years or even decades to pay off. There are even some individuals who are still paying on student loans well into their retirement years! The burden of this debt can indeed be long-term, and it can erode your quality of life as well as your ability to save for the future. While some Americans simply have no ability to pay for college without at least some student loans, the fact is that many students actually can finish college without any debt at all if they apply the right strategy.

Minimize Living Expenses

Debt is typically accrued when your personal expenses exceed your personal income. Many students rush blindly into college only considering how they will pay for their tuition and living expenses on a per-semester basis. As long as they obtain enough student loans to cover their expenses, they are fine. The fact is, however, that if you minimize your living expenses, you are taking one step toward minimizing or even eliminating debt during your college years.  Consider factors like living at home with your family instead of in a dorm, commuting to school with a friend or using public transportation and other affordable transportation methods. It may be more convenient to live on campus and to drive around in your own car, but there are considerable expenses associated with these luxuries.

Maximize Income

In addition, consider how you can generate income during your college years. Your goal may to graduate early and begin your career quickly, but this may actually be the more costly route to take. Consider how your college expenses would be spread out over a longer period of time if you attended classes part-time and worked part-time. Your tuition and fees will be lower and more manageable each semester, and you will be earning income to pay for living expenses and your tuition. In addition, you may actually enjoy greater earning power after your graduate if you find an entry-level job in your field of study. This will give you experience in the field that other new graduates may lack.

Choose Affordable Education

Many students make an effort to get into the best college that they can. There is indeed some notoriety associated with top colleges and universities, and if you aspire to be a CEO of a major corporation, to run for political office or to be a brain surgeon one day, attending a school with the highest reputation may be worthwhile for you. However, if you intend on working in social services, early childhood education or another field wear the earning potential and job opportunities will not necessarily be decided by where you earn your degree, paying for a pricey degree may simply be a waste of money.  Options such as an online accounting degree as well as other online degrees help to reduce total college expenses.

Online school offers a plethora of benefits that most may not be aware of. For example, you save thousands of dollars on commuting as well as room and board. Also, online universities allow you to transfer your credits back and forth from conventional brick and mortar institutions and other online schools. There is no reason to feel trapped in the decision. Simply attending an online school for a semester could change the course of your life, so visit a few websites and see if it’s the right choice for you.

Alternative Credits

Even when you choose to attend the most affordable college or university that is suitable for the career path that you want to follow, you should consider different ways to earn affordable credit hours. Many colleges and universities allow you to transfer a considerable number of credits into the school, and these can be applied to your degree. CLEP credit, community college course credit and other similar types of credit may be available at a considerable discount compared to the per-credit-hour rate at your college or university. By maximizing the use of transfer credits from more affordable sources, you can easily enjoy savings on the total cost of your college education.

It may be nice to enjoy the traditional college experience of living on campus in the dorm, taking a full load of classes each semester and spending the summers lounging by the pool back at your parents’ house. However, with the rising cost of a college education and the growing focus on the burden of student loan debt on graduates, the more realistic solution for today’s students is to follow these tips and attempt to graduate debt-free.

This article was written by Wayne Lee, a personal finance advisor and blogger.

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22 Comments

  1. December 5, 2012 at 11:13 am — Reply

    Unfortunately for me I didn’t follow any of this advice while going through school. lol. I made very little income and spent every penny of it (and more!). I hope some students can take this advice though and follow it because it’ll certainly pay off for them in the long run.

    • December 5, 2012 at 11:21 am — Reply

      It happens. At least you learned from it and was able to move on. For a lot of people, college has become a huge blur and are not sure where all the money went.

  2. December 5, 2012 at 11:28 am — Reply

    Unfortunately I did anything but limit my living expenses while I was in school. But, hey, it taught me an invaluable lesson. I did go to a community college my first two years though, so that saved me a good chunk of money on tuition.

    • December 5, 2012 at 11:29 am — Reply

      I went a little out of control the first two years, but when I lived off-campus, I started to treat my money a little better.

  3. December 5, 2012 at 3:56 pm — Reply

    One thing I remember about going to Uni was some of my mates who could stay home chose not to. The reason was they didn’t want to live at home with their parents and go to school they wanted to feel independent like the other kids and set the rules. Sad thing is they paid the price for that when they could have stayed in their own city to go to Uni and save thousands. When we are young sometimes we aren’t thinking the way we should. I would have stayed home in a heartbeat to save cash if my program was available. Mr.CBB

    • December 5, 2012 at 3:58 pm — Reply

      I can see both sides of that Mr. CBB. Most college students are not thinking about the debt they are about to incur, but more about their new “freedom” from home. The price of that freedom will be paid sooner or later.

  4. Sicorra@TacklingOurDebt
    December 5, 2012 at 4:44 pm — Reply

    I think maximizing your income while you attend school is very important. I worked most nights after school and every summer.

    I read a blog once from a man that made a lot of money while he was attending university by offering group tutoring sessions to students in earlier years then himself. He made a ton of money over just 6 months. Very creative idea!

    • December 5, 2012 at 4:46 pm — Reply

      I agree Sicorra. I worked while in college and I think everyone should. If you can come up with a creative idea like the man you read about, then it will be a win-win situation. You might be able to make your idea a full time career.

  5. December 5, 2012 at 9:32 pm — Reply

    I want to add: LEARN HOW TO USE A BUDGET. You graduate high school and are now forced with huge, real life money making decisions and so many kids don’t have the faintest idea how to.

    • December 5, 2012 at 9:33 pm — Reply

      Quality addition Catherine. My parents taught me about budgeting when I was young, so I didn’t have that problem, but there are many more that have no idea what they are doing. Perfect addition to the list.

  6. December 5, 2012 at 10:43 pm — Reply

    Good list. I got a pretty big scholarship for undergrad but still had living expenses. I went to a fancy “brand name” grad school. I don’t regret this decision, but have since learned I could have gotten a similar education for a fraction of the cost at a less prestigious school. Live and learn, right?

    • December 5, 2012 at 10:49 pm — Reply

      As long as you don’t regret your decision, then what does it matter. It probably taught you some good lessons and what are you going to do about it now?

  7. December 6, 2012 at 7:12 am — Reply

    It is interesting that student debt is such a heavy burden for people in the US. In Australia most people have paid off their student loan debt in their early to mid twenties.

    • December 6, 2012 at 10:47 am — Reply

      They are a very large burden here, but many have the mentality that the education is worth it. In some cases, it might not be. Those are things that have to be thought of before heading off to school.

  8. December 6, 2012 at 7:48 am — Reply

    It’s tough with tuition constantly rising. It’s nearly impossible to go to a private school and still graduate debt-free, unless you get some massive scholarship combined with help from Mom and Dad combined with living at home. It really depends on each person’s situation and ultimately how much tuition you are responsible for.

    • December 6, 2012 at 10:47 am — Reply

      I agree DC. It is getting harder and harder to get out of school without any debt. I wish it wasn’t the case, but unfortunately, it is.

  9. December 6, 2012 at 3:58 pm — Reply

    These are all great tips! A friend of mine is paying her way through college as we speak. She is doing it by living at home and working two jobs in addition to her studies. It will pay off!

    • December 6, 2012 at 4:05 pm — Reply

      Glad to hear it Holly. She will be happy when she is done and doesn’t have any debt or at most very little debt.

  10. December 6, 2012 at 7:56 pm — Reply

    Great tips, I think along with choosing an “affordable” education it is important to consider what education is going to be a good investment. An inexpensive community college diploma in basket weaving may be cheap but you would be unlikely to see a return on your tuition/time investment.

    • December 6, 2012 at 9:24 pm — Reply

      I completely agree Jon. You can learn basket weaving on the job.

  11. February 17, 2015 at 8:43 pm — Reply

    Thanks for this advice. I wish I had seen this before I went to grad school. I think I spent more time thinking about what school I was going to go to then how I was going to pay for It. Now my family is on a journey to pay down all our debts including my student loans.

    • February 20, 2015 at 10:29 am — Reply

      You sound like many. Most people just worry about the school, but rarely look at how to pay for such education. It’s a dilemma plaguing millions.

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