If you are currently enrolled in college, planning to start college this fall, or you are nearing college age, you are right to worry about the future of student loans. After all, college costs continue to increase every year, and all proposed “solutions” deal with debt forgiveness rather than dealing with the root of the problem.
The government is busy providing more solutions to the college debt crisis. In fact, the Biden administration is contemplating an amnesty plan that would erase up to $ 10,000 in federal student loan debt for each borrower. The thing is, those who are struggling to pay off student loans can have more than $ 10,000 in student loans to begin with. Not only that, forgiveness only applies to federal student loans (and not private student loans), and income limits limit who can qualify.
With all of this in mind, wouldn’t it be better to pay for college without taking out any student loan debt? While earning a debt-free degree is not easy, several experts I spoke with said it is still possible to pay for college with no debt. At the very least, the tips shared below will help you earn a degree while keeping student loan debt to a minimum.
Attend community college first
Debt.com’s CPA Howard Dworkin says he always urges young people to go to college, but not too far. In fact, she advises attending a community college first, which is cheaper.
According to Collegeboard statistics, tuition and fees over the two years, the public community college came in at just $ 3,800 for the 2021-22 academic year, $ 50 more than the previous year. In contrast, one year of tuition and fees at a public, four-year in-state school costs $ 10,740 for students in the same academic year.
If you attend community college and live at home for two years, you save money and don’t sacrifice anything, you can always transfer to a four-year school and complete your degree in that time, he says.
Dvorkin says students with good grades at community college can potentially receive a school they don’t have if they apply in high school.
“Once you transfer, hopefully you’ve saved money, but you’re a little more mature.” Says Dworkin. “The college’s freshmen are notorious for money that burns a hole in their pocket.”
Start planning in advance
Dr. Preston d. Cherry, she works as a financial consultant for contemporary finance planning, parents and students And should Begin college planning before and during high school.
Parents can start long-term savings and investment plans with college savings vehicles, such as 529 plans, he says. The money that grows in these accounts can be accumulated over time and used to pay for school and other qualified higher education expenses.
In the meantime, some states offer tax benefits to those who contribute to a 529 college savings plan. For example, the state of Indiana offers a 20% tax credit on the first $ 5,000 contributed to the project each year, which is worth up to $ 1,000 annually.
Families can also plan better by figuring out how some high school courses can meet double duty, according to Dr. Dawson. Says Cherry.
“Parents and students can take dual-credit courses at the high school level, which will transfer college credits required to graduate and to in-state universities to reduce college costs,” he says.
Invite family and friends to help
Your friends and family members may be willing to contribute to college savings if they know this is an option for you or for dependents. Instead of getting holiday money or some money on a birthday card, for example, they can make the same contribution to a college savings plan.
Patricia Roberts of GiftofCollege.com says that most people do not know what to buy for birthday and holiday gifts for your children and welcome the opportunity to give them a meaningful gift that does not grow. Most 529 plans allow account holders to invite others to make it easier to gifted toward higher education. There are also gift cards for this purpose, which you can purchase through the Gift of College platform.
“Even small gifts can add up over time and really make a difference,” says Roberts.
Get tuition assistance through your employer
Fred Amren of PayforEd says some employers help employees pay for pursuing a college degree. For example, Starbucks
Amrein specifically suggests finding out if your company or the company you are considering working for will offer tuition assistance. In fact, federal law allows employees to receive tuition reimbursement tax-free for up to $ 5,250 a year, and until December 31, 2025, contributions on behalf of employers are tax-free.
This means your company has an incentive to offer this perk and you will not be penalized if you receive it. Best of all, $ 5,250 is quite generous and may be enough to cover a year’s worth of tuition and fees, depending on the program.
Get serious about scholarships
Brian Galvin, who serves as chief academic officer for varsity tutors, says students who want to avoid or reduce debt should consider their scholarship search as part-time employment.
They say there is a lot of scholarship money, but very little of it will find you. Moreover, most students, including all or most colleges, do so with a full scholarship directly from the university, but with a number of smaller scholarships from corporations, nonprofit organizations, local civic groups, and other sources.
Those sources do exist, says Galvin, but it’s up to you to discuss your scholarship by controlling your guidance counselor, doing research, writing essays, and attending local women’s clubs and Rotary Club events.
“Scholarship is more ambiguous, competition is less, so scholarship search really pays off.”
Negotiating Never Stop
Finally, Student Loan Planner Travis Hornsby says students who want to reduce borrowing should focus their energy on negotiating their financial aid package. For example, you may ask the financial aid office at your school to use a “professional judgment” to determine if you may qualify for additional assistance.
This can cut your tuition bill several thousand a year and result in no extra work on your part outside of the time of request, Hornsby says.
“Colleges discount their prices more, and knowing it saves you a lot of money,” says Hornsby.