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How to Graduate College Debt-Free: The New Guide

Not much seems certain these days except for death, taxes, and the climbing cost of college and graduate degrees outstripping growth in wages. Between 2009 and 2019, public 4-year college tuition increased a whopping 36%, leading many millennials and members of Gen Z into unsustainable student debt levels that have fueled generational wars.

Meanwhile, competition to stand out to employers with stronger degree credentials is stiff. Despite the recent vogue against college as the default aspiration for young Americans, many graduating high schoolers and college graduates still feel they must take on hefty loans in order to obtain their next degree.

This kind of borrowing can set borrowers back for decades. A 2018 report found a lasting domino effect years after student loans are disbursed:

Long-Term Effects of Student Loans

  • 19% of borrowers said they delayed getting married
  • 26% put off having children
  • 56% put off buying a home
  • 42% put off buying a car
  • 39% said they’ve been unable to achieve their career goals

On average, a college degree still pays, but keeping a lid on educational costs is no longer as simple as “just waiting tables on the side.” Certainly the holy grail of graduating debt-free may seem like a relic of a past era. But with ingenuity, research, and a competitive academic record, alternative methods of funding can still make it possible to graduate from college either completely debt-free or with greatly reduced student loans. To do so requires some tried-and-true old advice—and a dash of new rules as well.

Alternative Ways to Pay for College

The traditional starting point for students seeking financial aid is typically student loans. However, loans often come with steep, unforgiving interest rates, and can mire graduates in debt for decades after graduation. These alternative ways to pay for college can help you sidestep the student loan trap.

Scholarships

Scholarships are financial gifts to be spent on education. They don’t need to be repaid, and there are thousands of them available at any given time. The key to success when searching for scholarships is thorough research and an early start. Some scholarships are awarded one full year before they start.  It’s also very important to be on the lookout for scholarship scams that could sideline your efforts to graduate debt-free.

You’ll find many different types of scholarships in your research. Some are institutionally funded, meaning they’re offered through colleges and universities. Others are donor-funded and offered through private organizations. Some scholarships are based on merit, or how well you’ve performed academically in the past, or how you respond to an essay prompt. Other scholarships are need-based, meaning the funder looks at your and your family’s income and background to determine whether that funding may mean the difference between attending college and not. You may also find scholarships for certain areas of study, or for certain types of students—like adult students returning to school, parents, BIPOC students, students from rural areas, and so on.

Traditional starting points for a scholarship search are your high school counselor or your school’s financial aid office, and a variety of online scholarship databases like FastWeb, the College Board, Niche.com, and Scholarships.com, Chegg.com, and Peterson’s.

Because the scholarship scene is competitive, you’ll have to consider some newer approaches to maximize your chances of success. You can work the phones or Facebook groups to track down less-well-advertised local opportunities, perhaps offered by community- or faith-based organizations in your hometown, or even local car dealerships. Also, keep in mind that the more work there is (such as a lengthy essay) for the award, the less competition you’ll be facing. Making sure you have a compelling personal story will help you craft essays that set you apart.

Grants

Like scholarships, most grants are financial gifts that do not have to be repaid. Some grants come with stipulations, like successful completion of a college degree, program, or academic year, so be sure to do your research. And apply early—grants are usually first-come, first-served.

The best place to start your grant search is the federal grants website. There, you’ll have access to a compendium of tips, a customizable search feature, and the ability to track your application. Local and national nonprofits and foundations are also great sources of grants—GuideStar is a good starting point.

Grants are usually need-based, like the federal Pell Grant given to undergraduate students with exceptional financial need. Because of this, you will likely need to start by submitting a FAFSA form. You may need to submit a FAFSA for each year you receive a grant. Additionally, many grants have eligibility terms or reporting requirements to explain how you spent the money. Be sure to do through research and familiarize yourself with the details of the grants you apply for and receive.

Tuition Reimbursement

A shortfall of qualified, skilled workers in the U.S. means many employers now offer tuition reimbursement to employees—in fact, according to a 2018 Society for Human Resource Management survey, more than half of all companies offer undergraduate educational assistance. If you’re currently working for a company and plan to continue to work throughout your education, it’s well worth it to check with your employer to see whether they offer tuition reimbursement that can help get you through college debt-free.

If you don’t currently have an employer that helps pay for education, you may even consider getting a job at a particular company or organization with a robust tuition reimbursement plan. Some companies that offer tuition benefits to employees include Starbucks, UPS, Home Depot, Chipotle, Walmart, the United States Postal Service (USPS), and many more. Eligibility for tuition reimbursement varies across companies: some require a certain length of employment before you’re eligible, others will reimburse tuition only for specific degrees, and most have clear eligibility guidelines determining which employees are eligible for reimbursement.

Military Benefits

The U.S. military offers a cadre of tuition benefits for qualifying members as well as for their spouses or dependents.

GI Bill benefits are a general umbrella of educational benefits that help pay for college and other training programs for veterans of the U.S. military. The Post-9/11 GI Bill helps cover school or job training for members who have served on active duty after Sept. 10, 2001. The federal VA also offers free veteran educational and career counseling services for former military members.

Current members of the military may be eligible for tuition assistance to be used during off hours. The different branches of the military also offer partial or full loan repayment programs for enlisted members with loans in good standing—be sure to research the options offered by your branch of military to learn what options you have.

Some schools participate in the Yellow Ribbon Program, which can help pay tuition costs that the Post-9/11 GI Bill doesn’t cover, so choosing your school carefully may help ensure you can cover additional costs and graduate debt-free.

Additionally, the federal government and various nonprofit organizations offer financial assistance to veterans. Students from military families may also be eligible for a federal Iraq and Afghanistan Service Grant based on several factors.

Work-Study Programs

Working part time during college not only helps bring in extra cash, it also provides experience, networking, and a support network outside the classroom. Federal work-study is a student aid program for students with financial need that provides employment while a student is in school either part time or full time. The work-study program encourages community service work either on or off campus and is available to participating schools. Check in with your financial aid office to determine whether your school participates in this program.

Private School Grants

Some schools may not be eligible for federal grants and scholarships. In these cases, look to community- or donor-funded grants to help offset the cost of college. If you’re attending a private college, check in with the financial aid office to see what sorts of grants may be available to you. You may find financial resources gifted to your school by generous individuals for the purposes of supporting currently enrolled students with financial needs.

Crowdfunding

If push comes to shove and you just can’t make ends meet, you could consider minimal to moderate crowdfunding to help fill the financial gap. Sites like GoFundMe offer platforms for soliciting donations from friends, family, and even strangers, and may help make a dent in college costs. Although it would be unwise to rely on crowdfunding for all your college costs, every little bit helps, and any small amount you receive might help offset costs like textbooks or supplies.

Ways to Save on College Costs

Scholarships, grants, work-study, and crowdfunding are methods to bring in funding to pay for college and graduate-debt free. But cutting costs is the other end of the affordability equation, and can help you navigate your education in the most inexpensive manner possible. Follow these tips to lessen your college expenses.

Before College

Start planning early to save money, make pivotal decisions, and accelerate your educational path. The less you dawdle, the less unnecessary expense you’ll encounter.

Save Early

Whether you babysit, mow lawns, work a cash register, build spreadsheets, help care for elderly family and neighbors, or provide technical support, start saving money as early as possible. Although spending cash is nice to have, consider setting aside a portion of every paycheck to help pay for college. Savings can really add up, so start early!

One way to make saving money easier is to open a savings account. This should be easy to do through your local bank—you might even be able to create a savings account online and avoid visiting the bank altogether. Consider moving a little money into your savings account on a regular basis—maybe a portion of every paycheck, a flat amount every month, or any extra money you have after bills are paid.

You could also look into opening a 529 tax-advantaged savings plan to set aside money specifically for future educational expenses. There are a couple options the 529 plan offers, including prepaid tuition plans and educational savings plans. The money you, a family member, or a family friend puts into this plan is then invested, and will grow over time. If you have family or family friends who are part of your college search or decision-making process, you could consider discussing a 529 savings plan with them.

Earn College Credit in High School

Many high schools offer options to earn college credits before graduation. Earning college credits prior to graduation can help you graduate faster and save on tuition.

One way to earn college credit in high school is to take Advanced Placement classes and exams. Speak with a guidance counselor at your high school to see which courses are offered, and whether you’ll need to take a placement exam in order to enroll.  Another way to get ahead on college credits is to explore dual enrollment options, also called concurrent enrollment. Dual enrollment refers to college-level courses available for high school students, which may be taught at a high school or on a college campus.

For adult students, students with significant prior work experience, or students with a military background, a prior learning assessment (PLA), sometimes called Credit for Prior Learning (CPL) or experiential learning, is a way to evaluate knowledge and competency gained outside the classroom. A PLA helps give you credit for what you know, rather than relying on a series of college classes to demonstrate competency. Gaining credit for prior learning may allow you to skip fundamental classes, graduate early, and pay less on tuition.

Choose the Right Institution

The type of college you attend will significantly affect the cost of your education. In general, choosing a low-cost college can help you graduate debt-free while likely providing you with a similar quality of education as a private or high-cost school. Colleges usually charge less tuition for in-state students and more for out-of-state students. Starting your search with in-state schools is a good way to keep the cost of tuition low.

A counterintuitive choice that flies in the face of this traditional advice to stick with low-cost schools is to try for blue-chip, competitive universities. While there have long been some colleges and universities that offer no-tuition college experiences, such as Berea College and College of the Ozarks, as well as the military academies such as the U.S. Naval Academy, the Air Force Academy, or West Point, it’s only been more recently that more mainstream Ivy League and Ivy League-equivalent schools have offered to cover tuition for students who come from families that earn below a certain income threshold. If your application is strong enough, you might gain entry into competitive brand-name schools that meet eligible students’ full financial need without student loans as part of the package. This list includes Harvard, Amherst, Cornell, Duke, Dartmouth, Yale, and Stanford.

Community colleges are a traditional mainstay that usually charge less for tuition than four-year universities—plus, if you’re using one of the dual enrollment options discussed above, you might even be able to attend a community college for free! Many students opt to attend a community college before transferring to a four-year college to finish their degree, saving tens of thousands of dollars in tuition in the process.

A significant cost associated with college is the cost of the physical space. Living on campus in a dorm or apartment is a major expense during your studies. Living off campus in a low-cost part of town or living with family for reduced rent is one way to spend less while earning your degree.

Additionally, try finding online courses and degrees—less commuting or reliance on a car will save you significant money over several years, and a fully online degree might even cost less than a hybrid or in-person degree. There are more and more 100% online options that are not only accredited but gaining credibility because of their faculty, many of whom come from well-known brick-and-mortar schools, or selective admissions. Some of these options offer disruptively low tuition or are even free. Examples include Coursera’s degree programs (which still require that the learner verify accreditation in a particular program area), the Quantic School for Business and Technology for MBA degrees, and University of the People.

During College

While careful preparation is key to graduating debt-free, there are ample opportunities to save money and cut costs during college. Planning, discipline, and remembering your goal of graduating debt-free will help you avoid financial pitfalls.

Enroll in an Accelerated Program

The longer you’re enrolled in school, the more tuition and related expenses you’ll need to pay. Accelerated undergraduate or graduate programs are structured for minimal in-classroom time, often allowing students to pursue a degree in a shorter time frame than a traditional degree timeline. Accelerated programs vary between schools, degree programs, and undergraduate versus graduate programs, but consistently offer a pathway to graduating quickly and therefore spending less time and money in school. Check with your school’s academic advisers to learn about accelerated degree options available to you.

Graduate Early

Graduating early is one of the simplest ways to cut costs and increase your chance of graduating debt-free. Along with accelerated degree programs, consider looking into summer classes that contribute toward your course requirements. If you don’t have added responsibilities outside of school, you could consider taking a heavy course load each semester—although this option requires a high degree of discipline and might not work for everyone. By working with an academic adviser, you can pinpoint the minimum number of classes needed to graduate, and thus spend less time taking electives that will add to your overall college costs.

Save on Textbooks

College textbook prices have risen 132% since 2001. Because some financial aid packages don’t cover the cost of textbooks, many students are finding alternate ways to get their books. Textbook costs vary based on the course, the teacher, and the school, so there’s no one-size-fits-all solution to saving on textbooks. But once you have your course schedule, some research may pay off. Check to see whether the books you need are available at a library, or as a digital download or rental. If you have friends in the same classes, you could check in with them to see about purchasing textbooks together, or borrowing textbooks they’ve already purchased. Do note that sharing textbooks with others will require the discipline to read quickly and being careful not to damage your shared books.

Budget

The key to financial success at any stage of life is developing a personal budget. By taking some time to look honestly at your income, spending, and savings, you’ll be less likely to spend excessively or fritter away financial aid on unnecessary expenses. Free phone apps connect to your bank account and can give you an overview of your spending habits, allow you to set financial goals, and send you push alerts when you’ve gone over your budget. If you want to keep it simple, a spreadsheet template can be effective in budgeting as well. By sticking to a budget during college (as well as afterward!), you’ll be better prepared to avoid financial pitfalls, save for unexpected expenses, and graduate debt-free.

Find Affordable Housing

Living in a dorm feels like a quintessential college experience, but can come at a premium cost. Save money by finding affordable housing options: Consider living off campus instead of on campus, finding roommates to share the cost of an apartment, or living at home with family. With colleges moving to online courses, attending school from home can help with affiliated costs like commuting, car expenses, on-campus meals, and so on.

Explore Loan Forgiveness Opportunities in Your Career

In some cases, graduating completely debt-free simply isn’t possible. If you think you’ll graduate with some student debt, look at options for loan forgiveness early on to find out what your best options are. Some employers offer loan forgiveness to employees, including Aetna, Nvidia, and many more. In order to qualify for employer-funded loan forgiveness, you may need to work for an employer for a certain length of time, seek a certain type of degree, or display a certain level of financial need. Some AmeriCorps service programs also offer an educational award upon completion of the term that can be applied to student loans or toward future education. Be sure to do careful research before relying on loan forgiveness plans, as they change often and usually come with lengthy stipulations.

Resources

These are just a few helpful resources to help you begin your educational journey and strategize the best way to graduate from college debt-free.

  • U.S. Department of Education Federal Student Aid: This is a good place to start your educational funding research. Get guidance on funding choices, find options if you’re already enrolled in college, and learn how to repay loans or existing debt.
  • Pell Grants: As one of the most well-known need-based financial aid grants, federal Pell Grants are awarded to students who display exceptional financial need.
  • The College Board: This resource connects students to future educational opportunities by providing information on transitional steps and college success.
  • CareerOneStop: Find career resources and advice as well as pay ranges, educational degree expectations by career type, and more.
  • Bureau of Labor Statistics: Make educated choices about your future with up-to-date employment and wage data broken down by career type, geographic region, and educational attainment level.
  • The College Investor: Visit this resource for personal finance advice aimed at college-age students in a changing world.
  • Forbes: Stay on top of national and global financial trends with this business-focused news source.
  • Free Application for Federal Student Aid: Most need-based financial aid, whether scholarships, grants, or loans, will require you to submit a FAFSA form. Be sure to pay close attention to whether you’ll need to resubmit one each year of your financial aid.
  • U.S. Department of Education: The U.S. Department of Education administers many federal loans, grants, and scholarships, and provides opportunities to stay up to date on research, data, and financial aid developments across the nation.
  • Libby: Save money on textbooks by checking out e-books from your local public library for free.
  • Chegg: Explore this resource for finding used textbooks, e-books, and tutors, checking resources for plagiarism, and more.