Is a Debt-Free College Education Possible?

Congresswoman Virginia Foxx’s recent comments about how she has “little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there’s no reason for that” added fuel to an already raging fire over the affordability of a higher education, and what—if anything—the government should be doing about the roughly one trillion dollars in outstanding student loan debt.

Putting politics aside, is she completely out of touch with the reality of the cost of a higher education today? Or is it possible to graduate debt-free—even if you (or your parents) haven’t socked away enough, or if you don’t earn a coveted free ride to the school of your choice?

I put out a query looking for stories from students or (their) parents who have recently—or will soon—graduate without college debt. I only got three responses, but each shared some common advice that may give prospective students (and their parents) hope that it is possible to earn a four year degree and not owe half your paycheck to student loan lenders when you’re done.

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Drink Less, Work More and Don’t Buy Into Hype

Zac Bissonnette, the author of How to Be Richer, Smarter, and Better Looking Than Your Parents was graduated from the University of Massachusetts Amherst in 2011. He has no student loan debt.

His number one piece of advice? “Don’t fall for all the hype about how it’s so important where you go to school,” he says. “When you look at the real horror stories (about student loan debt) it’s usually people who bought into the scam that one school is better than another.”

“There are two sets of schools you should go to,” he insists. “Either one of the most elite schools in America or your state public school.” The top schools have large endowments and generous financial assistance, he explains, while in-state public schools offer “just about any major you need,” and are affordable. “The average cost is around $250/week including room and board,” he notes.

And stop focusing on the rankings of the “best” schools, which he believes get far too much attention. “Maybe one in five HR people are going to know the rankings of schools. Employers don’t read that. Unless you have kids in college, you don’t read that,” he says.

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Bissonnette also encourages students to work during school. “The average college student is drunk about 15 hours a week,” he says, and he’s not joking. At least some of that time could be spent working. He brushes off the idea that working will hurt a student’s grades. “Students who work more than 40 hours a week graduate on average with the same GPA as those who don’t work at all.”

And there’s another trap he says students should be careful not to fall into. The first year financial aid package may be quite generous, but once a student is enrolled, they’re hooked and each year, costs can go up/financial aid can go down. By the senior year, the student may find himself or herself taking on a lot more debt than planned.

Bissonnette is as blunt as Foxx at times: “There’s a lot of borrowing for college that doesn’t need to be happening,” he insists. But he quickly adds that he does have a lot of sympathy for students with massive student loan balances they have no shot at repaying. He believes it’s a rare 17-year-old student who is prepared to go against the advice of guidance counselors, his or her parents, and everyone else who is saying an education at a particular school is a good investment.

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Compromise—Or Join the Army »

Image: CUNY Academic Commons, via Flickr

Compromise—Or Join the Army

Neal Frankle, a financial planner and blogger at WealthPilgrim.com says students need to do four things to minimize college debt:

1. Pick the right school.

2. Pick the right major.

3. Get involved at school.

4. Learn how to budget.

He has two daughters in college right now, and neither of them will graduate next year with any debt. While he did save for their educations from “the day they were born,” that savings fund took a hit a few years ago. “I have less for them than I had planned because of the market downturn, but they are doing fine. They work during the summer,” he says.

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Frankle is also a big believer in avoiding the hype of a very expensive school. His middle daughter was accepted into NYU and the Berkeley School of Music, both of which cost $60,000 a year.  “She wanted to study the music business and Berkeley was #1,” he says. But he knew there was a school “right down the street that’s #2 and it’s $20,000 a year.” Turns out, though, that she really wanted to go away to school, so they compromised on an in-state school not too close to home where Frankle says she’s very involved in the school, and getting a world class education.

His eldest daughter joined the Israeli Army, which is paying for her college education. “I am completely serious,” says Frankle. “That’s another strategy—join the Army.” Frankle also believes going to a community college for two years before going to a four-year university can be a good strategy. “Would you rather live at home (and go to a community college) for a couple of years, or be forced to live at home until you’re forty because you’re saddled with a lot of debt?” he asks.

[Related Article: The Next Bubble: Is It Time to Cap College Tuition?]

He points out that most people don’t end up working in the field in which they got their degree, which makes the idea of going to a particular school because it offers a special major or program a gamble. He advises students to seriously consider what their goal is before they go to college. “Hopefully part of it would be to make a living when you graduate,” he says. “That being said, you should study something that will help you achieve that.” Some may learn they don’t need to go to college after all.

Frankle, who says he talked a lot with his daughters about their college choices and what those choices would cost them, has also insisted they learn how to budget and manage their own money. He likes the You Need a Budget software. His youngest daughter gets a fixed amount of money she has to use each month to pay for tuition, as well as all of her other expenses. “If she doesn’t have tuition money, she doesn’t go to school next year,” he says.

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Dig Deep, Cut Back and Get Creative »

Dig Deep, Cut Back and Get Creative

Andrew Schrage, co-owner of MoneyCrashers Personal Finance, earned his degree from Brown University in 2008. He has no student loan debt. He says he used a variety of strategies to “make my debt-free graduation possible.” In his own words, these strategies included:

1. Work Through High School

During my freshman year of high school, I started multiple side businesses of my own. I bought candy wholesale and resold it to friends. I cut grass in the summertime, raked leaves in the fall, and shoveled snow in the winter. I performed additional services on an as-needed basis, such as gutter-cleaning, shrub trimming, and wedding.

I was able to keep up with all of this while staying on top of my classwork, and I invested most of my earnings in CDs, using a layered approach. I got this idea from my parents: I staggered the opening of the individual CDs so that I always had at least some access to my money at any one point in time. It also allowed me to take advantage of better rates when when they became available. This generated a significant portion of income when it came time to pay for school.

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2. Dig Deep to Earn Financial Aid

I visited my school’s financial aid office and got as much advice as possible regarding grants and scholarships. I followed this up with some Internet research, looking for any program I might qualify for based on my age, ethnicity, gender, religion, and so forth. I exhausted all of these possibilities before I even considered student loans.

3. Choose an Affordable School

While I didn’t do it personally, a great option is to attend a community college for the first two years of your education. All of your credits will transfer, and you will save a lot of money by taking core classes at a fraction of the cost of a university. You should also attend summer sessions, which often reduce tuition expenses.

4. Cut Back on School Expenses

There are many ways to cut back on standard expenses while attending college. First of all, I always purchased my textbooks used, and resold them online when I was finished. For entertainment, I kept it simple. Excessive bar-hopping was replaced by free on-campus sporting events, affordable concerts and campus events, and a movie every now and then—and I kept myself on a strict entertainment budget. Although I did use credit cards during college, I never carried a balance and never used them to finance my education. I used the best available cash-back rewards credit cards to increase the savings.

[Related Article: Millenials Struggling With Massive Debt Load]

5. Utilize Alternative Financing Options

I was also able to get a loan from my parents to help pay for school. The interest rate was awesome, and I paid this off as quickly as I could.

6. Generate Income

In addition to working while in school and reselling textbooks, I also sold whatever else I could find to generate cash. This included old digital cameras and unused Christmas gifts, among other things, using Amazon as my selling platform.

Ultimately, rather than viewing student loan debt as a way of life and putting off dealing with it until you graduate, you should focus on minimizing and eliminating it as soon as possible.

Have you managed to complete college in the past few years without taking on massive amounts of debt? We’d love to hear how you did it. Feel free to share your strategies in the comments section below.

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