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Go to College Without Going Into Debt: Impossible?

According to the Motley Fool UK, the Consumer Credit Counseling Service (CCCS) has stated that unless parents are in the fortunate position to provide their children with “absolute financial support” during higher education, that students must accept debt as a fact of life. (Students Must Accept Debt, Motley Fool UK.) The rising cost of a college education contributes to this, of course, as does the necessity of a degree for the “best” career paths — those with the highest earning potential.

In general, individuals with a college education will earn more over their lifetime (though there are notable exceptions), justifying the extra expense up front. The best of both worlds is then to limit the expense where possible, and therefore the debt, and still earn that worthwhile degree.

Here are some options beyond loans for students whose parents are not in the position to provide “absolute financial support.” If these can be combined, the student will have less exposure to debt.

Firestone Library, Princeton UniversityGet scholarships. It is possible for scholarships to pay for your entire college education, but not easy. Most scholarship programs require students to excel in a certain area, academic or extracurricular, and the chances of exceling at enough different areas is low. Some scholarships are based on your ethnicity, as well. If you’re a minory, you may be in luck. Start with the College Board’s Scholarship Search.

Find grants. Grants are the next best things to scholarships. In general, the funds are more limited, and are based mostly on need rather than academic prowress. Grants are also used to encourage students to undertake certain disciplines. For example, as teaching is often an unattractive profession — this comes and goes in phases — grants (and loan forgiveness) are occasionally offered to those studying education. Here’s a good overview of what may be available.

Attend a low-cost college. Attend a public university rather than a private university. Still, rather than a public university for four years, spend two at a community college and finish the degree at a public university. Take into account that the connections you make at college and the degree you receive, in some disciplines, may have an effect on the first job you receive out of college. That first job — if you continue your entire life on that same career path — can affect your earnings over your lifetime. (My first job was for a non-profit organization earning about $550 a week. I could have done that without a fancy bachelor’s degree from my private land-grant university.)

Take advantage of work-study programs. If you qualify, a work-study program is a way to earn income that can be used for paying college and living expenses while still earning the degree. This is my less favored option, as to make the most of the educational process, the stress of a job can be distracting from the true goal of the four years. Not all college jobs are created equal; A minimum-wage job at the university library, would not be too distracting at all, unlike a higher-paying job at the local strip club (not endorsed by the Federal Work-Study program).

Corporate sponsorship. My current company offers significant tuition reimbursement — enough to cover public university tuition in many cases — for those employees earning the bachelor’s degree. Other corporations provide the same benefits. There may be a requirement that the degree be in a field related to the company’s business or the division. For example, a financial services company may require a degree in business, accounting, finance. If you work in the company’s human resources department, you may need to earn a degree in human resources to qualify for reimbursement.

The company will pay the school in advance of each semester, so you do not have to deal with loans at all — though college aid advisors recommend getting a federal loan and using the reimbrusement to pay back the loan immediately. This ends up costing more thanks to origination fees. It also opens up the chance of not using the reimbursement to pay off the loan.

Other options. If I remember correctly, I could have gone to Princeton University for free, if I had been accepted. That benefit would be awarded to me because my mother worked there for the time I was going to college. I didn’t apply to Princeton as they surprisingly do not have a strong undergraduate music program and I probably didn’t have the GPA. (I later discovered, as an undergraduate playing in ensembles when home over the summer with Princeton graduate students, that I might have received a better education and had exposure to better peers in my chosen field than where I was.)

It’s going to take a combination of all of the above to completely avoid debt when it comes to paying for higher education. I believe it can be done, but in some cases, such as working and maintaining eligibility for scholarships, may put too much of a strain on the student.

I’d like to hear stories from anyone who has managed to graduate with a bachelor’s degree without incurring any debt. What choices did you make and were there any sacrifices? Please feel free to share.

Photo credit: jasonhe

Updated February 6, 2012 and originally published July 2, 2007.

About the author

Luke Landes is the founder of shizennougyou. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 9 comments… read them below or add one }

avatar 1 Anonymous

Speaking as a Brit, I can tell you that we don’t really have many scholarships, grants or work-study programs. And all courses at all Universities pretty much cost the same (max allowed by government) – the only variable is the city in which you study. This is because until 10 years ago, University was free and everyone was entitled to means-tested grants.

I realise that things are different on the other side of the pond, but since your sources were British, I thought I’d chip in.

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avatar 2 Anonymous

I went to a state school instead of MIT and so instead of spending upwards of 40k a year I had a full ride (tuition, books, room, and board) with a national merit finalists’ award. I bought a trailer (nicer than the apartments in the area), rented to roommates/friends at cheap rates, and I even had enough money from the scholarships and trailer to spend a semester abroad. My field (Actuarial Science) couldn’t care less where you went to school, so I’m out and putting a down payment on a house already with all the money I didn’t go into debt with.

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avatar 3 Anonymous

I went to the local state school, lived with my parents for the entire 4 and a 1/2 years and worked (interned) close to full-time to pay for my school expenses.

It was a lot to juggle and sometimes I’d be up until 3-4 am on some nights just to finish work from my internship and class but I don’t regret it. I learned how to manage my own time and developed a lot of contacts at my jobs during school.

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avatar 4 Anonymous

I live in Cincinnati, Ohio. My daughter is looking at engineering programs at various colleges. The University of Cincinnati has a co-op program where students work for private employers in their chosen fields. It takes an extra year to graduate, but the engineering grads earn an average between $30,000 to $50,000 and gain real life work experience while completing their degree.
My daughter could live at home while attending school and would be charged in-state tuition. As a result, she could reasonably leave school with money in her pocket rather than debt. As a parent, the looks very appealing.

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avatar 5 Anonymous

I graduated from the University of Waterloo debt-free because I enrolled in their co-op program. In my opinion, this is the only way to get a post-secondary education, because the vast majority of employers prefer candidates with experience even when they’re looking to fill entry-level positions. After graduating, I had 2 years of experience, a ton of contacts from 6 different employers, had maxed out my 401k-equivalent scheme and had 0 debt. It goes without saying that I started way ahead of most of my peers, which is extremely important because the ones who start ahead usually finish ahead, ergo power of compounding.

The University of Waterloo is the first university in the world to offer the co-op program and as a result has the largest co-op program in the world. So, most of its students are enrolled in a co-op program. Since the students are in and out of campus every 4 months, they don’t feel as attached to the university and they don’t get the feeling that they’re part of that community. That’s the only downside in my opinion.

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avatar 6 Anonymous

I spend 3 years in community college and then 3 years in the local 2nd tier public college. (In California, there’s the UC system and the CSU system.) By taking 6 years to do my degree, I was able to work hours and earn plenty of money to pay for everything. Didn’t get a cent in financial aid or loans.

My major was computer science so there’s really no impact on job prospects unless your goal is to to design CPUs at Intel. Since my goal was much simpler, I easily found a job even before I officially graduated (had some units left for a Bachelors). Having no debt was very important as it gave me plenty of surplus to roll the dice and start a new business with some partners.

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avatar 7 Anonymous

I also chose the state school route. I’m lucky enough to have grown up in a state (washington) with an outstanding public university (it wasn’t really luck, it was a conscious decision on my parents’ part), and I went to the best university in the state. With good grades and test scores, I got even that paid for – a state tuition waiver for my HS grades, and a series of scholarships and research jobs that came with stipends.

One thing I didn’t know and just lucked out on was that by applying for so many scholarships, I not only got things paid for, but I developed a great resume. When it came time to apply for graduate training, that made a huge difference – not only did I get in with full funding to every program I applied to including the three most competitive programs nationally, but I even got a 10k signing bonus to sweeten the deal.

Another streak of good luck attached to this strategy: at a large state school, you typically have first rate professors, and a mix of highly motivated students (so you have plenty of peers to challenge you) and less motivated / more distracted students (so your professors aren’t yet sick of students who all want extra attention, and are instead still happy to have you show up with further questions / ask to work in their lab).

I was really unsure when I made my decision to go to a public university when all the rest of my peers were going to private universities – but it’s made all the difference. I would do it the same way again in a heartbeat.

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avatar 8 Anonymous

I was fortunate that my parents paid my tuition, room, and board for me for my first year of school at a state college. After that, I was restless with school so I joined the USAF. I got an Associates Degree from the Community College of the Air Force, then I volunteered to work night shift so I could take night classes. Two years later, I got my Bachelors in science, and the military paid my tuition. This is not the route for everyone, but it worked for me and I have no regrets. :)

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avatar 9 Anonymous

My son is currently going to college on a combination of all of the above, except corporate sponsorship (actually, since I’m self-employed, I guess my “corporation” is sponsoring him!).

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