In today’s economy, prices of commodities and essential human needs only soar higher—and a college education is no exception. Going to college is a privilege for those who can afford it, let alone graduating and getting your degree. Because of this, many college students and parents incur massive education debt.
However, there are several ways to get into and graduate from college without a mountain of debt. Let’s discuss the education crisis in the US, how it has impacted student loan debt, and ways to manage your college costs to graduate as close to debt-free as possible.
The cost of college education in the US
Unfortunately, a college education is not just limited to tuition fees. You must also consider your daily expenses, boarding costs, books, supplies, and other miscellaneous fees to get through four years of college or more. According to a report by the Education Data Initiative, the average cost of college in the United States is $38,270 per year, including books and daily expenses.
Business Insider also reports that the average cost of public college in-state tuition is $11,610. In contrast, out-of-state students generally pay more to attend schools outside their home state, averaging $30,780 for tuition per year for a public college. In addition to tuition fees, room and board costs differ between public and private colleges, averaging $13,310 for a four-year public college and $15,250 for a four-year private college.
Related: The Real Cost of College and How to Pay It
Why is graduating debt-free important?
By the second quarter of 2024, the national student loan debt in the United States was reported at $1.6 trillion, with the average debt hovering above $29,000 per student. At this amount, most fresh graduates often struggle to pay for student loans many years after graduating, especially when they cannot immediately find jobs that pay well enough to account for both living costs and debt repayments. It puts a toll on graduates just starting their careers, who have a significant portion of their salaries taken for debt repayments that could otherwise be allocated for investment opportunities, early retirement savings, buying a home, or saving up to start their own business.
How to manage college costs and graduate debt-free
While incurring debt to go to college is unavoidable for most, there are several ways you can save for college and graduate debt-free or very close to it.
Know the costs of your colleges of interest
To effectively manage college costs, you need to identify the types of schools you want to attend and the fees you might incur at each one. You need to decide whether you wish to attend an in-state or out-of-state college, as the former will have significantly lower tuition fees than the latter if you’re a resident. Your costs may also be influenced by whether you choose a public or private institution, a two-year or four-year program, and future education required for your career plans, such as graduate or professional school.
Related: 4 Tips for Families to Maximize College Affordability
Invest in a 529 plan
Named after Section 529 of the Internal Revenue Code, a 529 savings plan helps parents and students lessen the burden of paying for college. Anyone can open a 529 plan on behalf of a student. These 529 accounts offer tax-deferred growth, meaning the earnings are tax-free and withdrawals for qualified educational costs aren’t taxable either.
“While it is mostly parents or grandparents who initiate 529 plans for their children, anyone who is at least 18 years old can open a 529 plan,” says David Speedy, General Manager at Workspace Direct. “Even students themselves who want to put their part-time earnings and gifts to a college fund [can start a 529 plan].”
Apply for financial aid
Offered by the US government, the Free Application for Federal Student Aid (FAFSA) is one of the most widely available financial aid forms. There’s no income limit to submit the FAFSA—and it’s totally free, as its name implies—but eligibility requirements vary to receive aid, including satisfactory academic progress and proof of financial need. FAFSA aid can come in the form of grants, loans, work-study programs, or scholarship opportunities to help cover tuition fees and other qualified education costs.
“The main purpose of student financial aid is to help economically challenged students finish college with the lessened burden of figuring out how to pay for college,” according to Grant Aldrich, Founder of Preppy. “However, regardless of need, students who don’t perform well and show no academic progress are always at risk of losing their federal student aid.”
Related: Infographic: How to Fill Out the FAFSA and Why It Matters
Consider work-study programs
After filing the FAFSA, you may have the opportunity to earn money while attending college through work-study. Work-study programs differ from regular part-time jobs in that they are funded by the federal government and offered through your college or university. Work-study jobs are often on campus and may even be related to your field of study.
“Students who are awarded work-study programs gain more than just monetary benefit from their chosen employment,” says Matthew Channell, Owner of TSW Training. “You’ll also gain skills, work experience, and training that would be highly beneficial when applying for full-time jobs in the future.”
This program assures you of compensation at the federal minimum wage or higher to help with your college costs. However, unlike other student aid and scholarships, you receive a paycheck instead of costs being automatically deducted from your tuition or account.
Get a part-time job
Not all students will be awarded aid or work-study through the FAFSA. In many cases, your chosen university or the state you’re in may not participate in certain student aid programs. Thus, the best and most common source of income to help manage student costs is a part-time job. Manageable part-time jobs aspiring college students can consider include:
- Tutor
- Teaching assistant
- Barista
- Babysitter
- Call center representative
- Virtual assistant
- Writer
- Retail salesperson
- Library assistant
- Fitness trainer
Related: Part-Time Jobs and Money-Making Ideas for Students
Become a resident advisor
Housing and dorm costs add significantly to your college costs. The same Education Data Initiative report says that students pay anywhere from $11,000–$14,000 per year for room and board costs at four-year colleges. Becoming a resident advisor can help you save on dorm costs, as resident advisors are typically offered discounted or free housing in exchange for spearheading dormitory activities, management, and conflict resolution between dorm residents.
Employer tuition assistance
If you’re already employed without a degree but still want to finish college, consider asking your employer about employer tuition assistance. “While employers are not required by law to offer all their employees educational assistance, there are multiple benefits in store for them if they do, especially if it is for a degree related to your current position,” according to Chris Aubeeluck, Head of Sales and Marketing at Osbornes Law. “By law, they can get tax-free benefits for qualified educational assistance for their employees.”
Gap years and community college
While it’s ideal to finish college as quickly as possible, your financial situation may not allow a quick turnaround. Taking a gap year is acceptable so you can manage your finances before obtaining your college degree, which would make you less reliant on student loans.
Taking a gap year between high school and college could help you earn money and become more financially ready for a four-year college program rather than taking years off in the middle, which would disrupt the continuity of your learning. Starting at a community college is another smart financial strategy, as it allows you to complete general education requirements at a lower cost before transferring to a four-year institution.
Related: Your Goals, Your Life, Your Gap Year
With proper planning, there are many ways for students to graduate college with little to no debt. Explore financial aid, scholarships, grants, or work-study programs to supplement your tuition and other education-related expenses. Get a part-time job to earn experience in addition to financial benefits. Or consider taking a gap year or starting at a less-expensive institution then transferring to be more financially sound.
Whatever choices you make, managing your college costs and graduating debt-free is an achievable goal with proper planning, implementing the right strategies, and exploring the best opportunities available to you.
For more expert advice on keeping down your costs and paying for college, check out all the blogs and articles in our Financial Aid section.
