How To Go To College Debt Free

How To Go To College Debt Free

August 31, 2021

College can be very expensive and the reality of graduating with $80k or more in student loan debt hits hard for many students entering college. With rising costs many students are looking for ways to get through college debt free. Here are a few ways to earn your college degree without taking on student loan debt.

Earn college credit in High School 
Too many students pass up the opportunity to earn college credits during their high school years for a fraction of what it will cost as a college freshman. There are several ways students can earn college credits while still attending high school: Advanced Placement (AP) exams  International Baccalaureate (IB) College Level Examination Program (CLEP) exams  Dual enrollment programs offered by a local community college Summer or Winter study programs at a local community college
It is important to note that not all United States institutions accept credit for AP, IB or CLEP scores and some institutions do not accept transferring credits. If there is a specific institution you are interested in attending, it’s a good idea to check their policies prior to paying for additional exams. 

Use Savings
Saving for college can help reduce the burden of a college education on a student or family and help cover some, if not all of your college expenses. It’s simple, the more you save, the less you have to borrow or find somewhere else. Here are several ways you can save for future college expenses:

     Traditional savings accounts 
     Permanent life insurance 
     Roth IRA for teenage student 
     Eligible savings bonds 
     Custodial accounts (UTMA or UGMA accounts)
     Coverdell education savings account
     529 plans 

Start saving what you can, as early as you can and work with a professional for the best way to plan for you or your family. Saving for education expenses could also have a significant impact on your financial aid qualifications so it’s always a good idea to work with a financial or tax professional on your specific needs.

Compare & Negotiate Financial Aid Offerings
First, it’s important to complete your Free Application for Federal Student Aid (FAFSA) as early as possible. Applications are accepted starting in October and the best financial aid packages tend to go to the qualifying students that apply early. 

Once your FAFSA is filed, and you are accepted to the institutions you’ve applied to, you will receive an award letter that details what financial aid you can receive at that particular institution. The offer will typically include the types and amounts of financial aid you qualify for from federal, state and school sources. Because your financial aid package is created specifically for you by each institution, your awarded amounts will vary from school to school. Comparing offerings will help you evaluate which institutions may be most affordable. 

You can also reach out to the financial aid department before accepting admission into an institution to see if they can improve your financial aid package. As other students send back rejections, additional financial aid may be available to accepting students.  

Scholarships & Grants
Scholarships are typically awarded based on merit and can help students pay for tuition and other college expenses. Eligibility requirements vary between scholarships, allowing students from diverse backgrounds to apply for different scholarships that match their academic abilities, extracurricular skills or future aspirations. Many applications require students to write essays or provide letters of recommendation. It can be a lengthy process with varying deadlines that are typically months before the start of the school year so it’s important to be aware of any approaching deadlines for the scholarships you are applying to. It’s also a good idea to apply to as many scholarships as you can find. In the age of the internet, there are scholarships out there for everyone and most organizations award more than one, you just have to find them. 

Grants are also awarded to help students pay for tuition and other college expenses; however, grants are typically offered based on the students’ financial need. The Federal Government is the largest provider of student grants and eligibility is determined using your FAFSA. Some institutions and individual states also offer college grants and if you are eligible, will be included in your award letter from the accepting institution. 

Work Part-Time
Many students work part-time while they are in college, some students even work full-time and sometimes the income you earn can completely offset college expenses. Some ways to make part-time income while an active student: 

     The side hustle – dog walker, babysitter, delivery driver
     Turn your hobbies into income – are you creative? Freelance your creative skills 
     Work Study – work on campus and your pay goes towards tuition
     Summer Job – lifeguards, summer internships 

Again, thanks to the internet, you can find thousands of opportunities on job boards and company websites, both part and full time. Remote work has also become more popular since Covid and can offer flexibility to work around your class schedule. Another resource is your college’s career services office, they can also help you clean up your resume.   

Work for an employer that offers a tuition program or ask your current employer
The list of employers who offer college tuition perks keeps growing. In a market where we see so many companies trying to attract employees, offering college tuition perks is a growing trend. Target is the latest US retailer to announce they will offer their employees, both full and part-time, access to debt-free education, even offering to cover up to $10,000 per year towards graduate degree programs. Although Target is the latest, hundreds of US companies offer similar benefits to their full and part-time employees. 

If you are currently employed, it’s a good idea to ask if there is tuition program in place. Some employers may have specific requirements for their tuition programs so it’s important to know the specifics. 

Consider the Military
US military servicemembers and veterans are uniquely eligible for generous benefits from the Federal Government, deservedly so. One of the most comprehensive education benefits packages since the original GI Bill was signed into law in 1944, came with the Post-9/11 GI Bill. Available to all servicemembers who have served after September 10, 2001 with at least 90 days of continuous service, full benefits are paid for those who have served at least 36 months and partial benefits are paid to those who have served less than 6 months. The full benefit an individual can receive under the Post-9/11 GI Bill is calculated from:

     Tuition & fees – not to exceed highest public in-state undergrad tuition & fees in each state. 
     Living stipend – equivalent to basic housing allowance in that zip code for and E-5 with dependents.
     Allowance for books & supplies - $1,000 per year 

More than 1,700 colleges and universities across the United States also offer Reserve Officers’ Training Corps (ROTC) programs. ROTC programs prepare students to become officers in the US Military and each Service branch has its own ROTC program. In exchange for a paid college education and post-graduate career, cadets commit to serve in the US Military after graduation. 

Consider an affordable school
If working during the school year is just too much and you don’t qualify for financial aid, considering the most affordable school may be the best fit for you. Public in-state institutions will typically offer resident students’ lower tuition than their out of state classmates, making them a potentially more affordable option. 

Community college is also a way to make college more affordable. Generally, the first two years at a four-year university are spent in general education classes. By completing your gen ed requirements at the community college level, you could save thousands. Some community colleges also offer scholarships or free enrollment to local students.  

If you still need to take out student loans, that’s ok.
Even with strict budgeting, scholarships, part time jobs and savings, you may still need to take out student loans. That’s ok, it’s not the end of the world. The key is to avoid student loans as much as possible, so if you’ve done your best to limit the amount of money you need to borrow, you shouldn’t need much time to repay them after college. 

It’s also important to remember that just because you need to take out a student loan one year does not mean you need to take out a student loan every year. 

Bottom line
There isn’t a “one size fits all” financial aid package and most students who graduate debt free utilize multiple funding sources. The most important thing to pay attention to is DEADLINES! You don’t want to leave free money on the table for missing deadlines. Another important thing to remember is that your financial aid package can change from year to year, just because you don’t get a scholarship or grant this year, doesn’t mean you won’t next year. 

Stephanie Follin is a Registered Representative with and securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.