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How to Pay for College Without Student Loans

Are you worried about how you’re going to afford to send your kids to college? You’re in some very good company.

I talk with parents all the time who dream of providing their children with the best higher education possible. But with the cost of college rising every year, financial concerns usually dominate the conversation. And that’s totally understandable. After all, look at these average price tags for yearly tuition and fees:

  • Public two-year college for in-district students: $3,770
  • Public four-year college for in-state students: $10,560
  • Public four-year college for out-of-state students: $27,020
  • Private four-year college: $37,6501

No matter which college route you choose, it’s expensive. And paying for it has become one of the biggest economic problems in America today. Do you compromise on the dream of helping your child go to college and maybe limit their future prospects? Or do you do the "normal" thing and take out student loans to ensure they have a shot at a great career?

Why Are Student Loans a Bad Idea?

I get it—you’re willing to do whatever it takes to help your child succeed. But way too often, I hear from people who wanted the dream so badly they went into debt to make it happen. That’s a huge mistake. What I want you to understand is that the “borrow money or skip college” dilemma is a myth. You don’t have to do either one! The truth is, there are many ways to get a great education and find excellent career opportunities without borrowing a dime. Connect with a qualified investment professional who can help you figure out a college savings plan.

Take it from someone who frequently talks to people who are in deep student loan debt: If you think you’re worried about money now, it’s nothing compared to the stress and pain of life with student loan payments. Just look at the huge financial headache facing today’s college borrowers and the parents who cosigned for them:

  • According to the Federal Reserve, Americans owe $1.6 trillion in student loan debt.2
  • The average student debt per graduate reached a record high of $38,792 in 2020.3
  • There are about 44 million student loan borrowers in America right now.4
  • Depending on the repayment plan and loan amount, it can take anywhere from 10 to 30 years to repay student loans.5

Hold up! Paying back the loan could take 30 years? No wonder some families are rethinking student loans, or college altogether. Debt may be considered normal, but it has a habit of sticking around way longer than you expect. Going into five-figure debt is no way to launch a career if you want your child to have a shot at long-term wealth building.

The good news is, your kids can graduate debt-free and ready to succeed. There are so many ways to cash flow a degree or get trained for an awesome career without borrowing. So, if you’re feeling anxious about the best ways to pay for college without student loans, let’s look at the options.

1. Pay cash for your degree.

Using your own money that you’ve budgeted for specific purposes is always the best and wisest approach to paying for anything. And that includes college. If you’re the parent of younger kids, now might be a great time to begin saving for their education. But if you’re getting closer to campus drop-off day and haven’t saved a dime, don’t panic. I have plenty of tips for you.

2. Apply for aid.

Everyone who wants to attend college must fill out what’s known as the Free Application for Federal Student Aid, or FAFSA. That’s just the form schools use to figure out how much money they can offer your child toward attendance, plus what kinds of aid you qualify for. A few facts to know:

  • The FAFSA is a form you or your child must complete each school year.
  • Types of aid it covers include federal grants, work-study programs, state aid and school aid—all of which I recommend. (It also covers loans, which are a terrible idea.)
  • Everyone should fill out the form. There’s no income cutoff to be eligible for financial aid, so you never know how much your child could get until you send it in.
  • The FAFSA does have a deadline that can vary by state and school, so have your child look at the official FAFSA website (and their potential college’s website) to see when the form needs to be submitted.
  • Once you or your child have submitted the FAFSA, you’ll get an EFC (Expected Family Contribution) estimating how much your family can afford to pay for college. Colleges will then look at those numbers and send an award letter saying what kind of financial aid your child can get. Read the fine print to make sure your child is being offered a scholarship or grant—not a loan.
  • Your child can keep getting financial aid throughout college, so they should fill out the form every year.

Depending on your financial need and the schools you consider, your child may be able to cover their education entirely through grants and/or aid from your state or the school itself. We’ll talk more about grants below. For now, just remember that all financial aid is awarded only to students who fill out their FAFSA

3. Choose an affordable school.

If you were to ask friends or neighbors the most important factor in choosing a school, you’d get all kinds of answers, like the name recognition, the size of the dorms, or the success of the football program. But here’s the truth: When it comes to choosing a school, the only relevant factor is if you can pay for it without student loans.

graduation cap

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At the end of the day, your top priority should be to find a school you can afford. This might mean adjusting your (or your child’s) expectations about going to a certain dream school.

On the other hand, it’s totally possible that their dream school is still within reach if you can find enough scholarships, grants and other aid to make it happen debt-free. I’m not here to discourage anyone from pursuing their dreams. My goal is to help you see that staying out of debt has to be your top priority. If it’s a choice between a full ride at State U and a $50,000 loan to go to a private university, I’m going to State U all day long.

Keep in mind that the traditional approach to college, where the student moves away to live on campus for four years, is not the only way to get an education—and it’s usually not the cheapest.

4. Go to community college first.

All over America, including your hometown, we have these wonderful schools known as community colleges. And I love them. Want to know why? Because they allow people to get valuable college credits on their way to a degree at much cheaper rates than if they’d enrolled in a four-year school right out of high school. They can knock out the basics at a community college for two years, then transfer to a school that offers bachelor’s degrees for years three and four.

And while I’m on the subject, let me deal with a myth I run into all the time. A lot of people seem to think doing their first two years at a community college will hurt them when they go to interview for jobs after graduation. The truth is that few employers (if any) even notice it when applicants only attended two years at the school they graduate from. The main thing they’re looking at is whether you have a degree, and after that, what you studied.

5. Consider directional schools.

Here’s a helpful tip in understanding how a lot of funding works for state schools. Most states have a flagship school where most of the academic research happens, and several other schools where the focus is more on teaching. The smaller schools tend to have names indicating where they’re located in the state. These “directional” schools not only focus more on your child’s classroom experience, but also have cheaper tuition and fees. That’s a win-win.

6. Explore trade schools.

In addition to four-year universities and community colleges, your kid shouldn’t ignore the possibility of trade schools. That’s where students who enjoy working with all kinds of practical skills like electrical work, mechanics, plumbing and home inspections can get valuable training that’s highly marketable. Not to mention, completing a trade school program usually takes less time and less money than getting a bachelor’s degree.

7. Apply for scholarships.

Now that I’ve talked through the basics of finding financial aid and an affordable school, let’s jump into some specific strategies for cash flowing school. Scholarships are one of your family’s most powerful tools in the journey to cover school without loans because they’re funds you earn and never have to pay back.

Here are my tips for getting the most out of scholarships:

  • Treat the scholarship search like a job—or at least encourage your child to treat it that way. Going to school debt-free is serious business, and the paycheck shows up in the form of award letters from scholarship committees. I recommend high schoolers spend several hours a day on summer breaks and weekends searching for and filling out every single scholarship opportunity they can find.
  • The internet is your friend here. Don’t be afraid of doing frequent searches—new scholarships and deadlines are being set up all the time.
  • Your child should be prepared to write some essays about their personal experiences and career goals.
  • Look into whether your (or your spouse’s) workplace offers scholarships for the children of employees.
  • Get in touch with local community groups, businesses and charities to find out if your child can apply for their scholarships. These are often awarded on the basis of community service or high school GPA.

8. Get grants.

Once again, we’re talking about free money you do NOT have to pay back—which is the only kind of aid you want. These grants are awarded by schools, organizations and federal assistance programs based on your financial need. Once you’ve completed your FAFSA, you’ll receive word on the federal grants you’re up for. But even if there are no dollars to be had there, you can contact your state grant agency for more aid possibilities.

9. Work during school.

Now we’ve come to one of my favorite ways for students to pay for a debt-free education: working while they’re in school. Wait, what? Why would I want your child to work a job during college? Here’s why.

I’ve learned through my own personal experience—and talked to plenty of friends and students who’ve agreed—that a certain amount of work outside the classroom or library actually boosts academic performance. I know that goes against the grain of what many in our culture assume, but research confirms that students working a part-time job (less than 20 hours a week) often have better grades than those who aren’t employed.6 A few job possibilities are:

Work-Study Programs

These allow your kid to work part time while attending school. They’ll find out if they’re eligible in your FAFSA letter. Work-study jobs are usually (but not always) on campus, which makes them a convenient way to combine work with schoolwork. Just be sure they understand that the paychecks are supposed to go toward school expenses—not for pizza or beer money!

Off-Campus Jobs

Many jobs are great for busy college students looking to cash flow school. Your child’s best bet may be customer service jobs that are compatible with a part-time schedule. There’s a lot of money to be made waiting tables, parking cars, or working at the mall. Or consider looking for a part-time office position that might be more in line with their career goals.

Side Business

There’s no limit to the number of ways your child can earn money if they have a valuable skill, hobby or artistic knack they can turn into a marketable product. Think about crafts, clothing design, music lessons and tutoring.

10. Live off campus.

For many, one of the biggest expenses in college is the cost of room and board. But there’s an easy way to eliminate that for some big savings—live off campus. Whether it’s commuting to class from their own apartment or continuing to live with you, your child can save a bundle.

And I absolutely get the fact that either one of you might not be thrilled with those possibilities. After all, you’re both looking forward to more independence. But there’s another way to look at this that you should consider. If you can see the college years as a temporary season of necessary sacrifice for the victory of debt-free living, you’ll be able to get through anything—even a few extra years under the same roof.

11. Get on a budget.

Now this is one of those pieces of advice that might sound too obvious to mention—until you realize how few people budget. Trust me, it’s worth your time to be sure your child knows how to make and stick to a budget before they leave for college.

If they’ll list their monthly income and expenses and give every dollar a job to do, your child will begin to really take ownership of their college experience. They’ll also get some insight into just why you don’t want them to take the easy way out by getting school loans. When they see how much it really costs to pay for a month of college in terms of food, transportation, clothing and rent, they’ll probably take their schoolwork more seriously too.

Plus, pointing your kids toward a fun, easy-to-use app like EveryDollar might even make them want to budget.

A Great First Step

Want to learn more about how to go to school without loans? Debt-Free Degree is the book all college-bound students—and their parents—need to prepare for this next step. Grab a copy today or start reading for free to get plenty of tips on going to college debt-free.

Now that you’ve got a solid plan to pay for it all, your kids could use their own road map for college success. So I’d also suggest reading The Graduate Survival Guide. That book walks through five mistakes to avoid making in college. It’s full of real-life stories from people who’ve been to school and found successful careers.

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About the author

Kristina Ellis

Kristina Ellis is a bestselling author who believes no student should be burdened by loans. Drawing from her experience of earning over $500K in college scholarships, Kristina helps thousands of students graduate debt-free through her syndicated columns, podcast appearances, online courses and books. She’s a co-host of The Ramsey Show, the second-largest talk show in America, which reaches 18 million weekly listeners, and she appeared in the award-winning documentary Borrowed Future. Kristina has appeared on NBC News, Business Insider, Fox & Friends, USA Today and Yahoo!, where she’s shared practical, real-world strategies for going to college without debt. Learn More.

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