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How to Pay for College: The Definitive Guide to Paying Less and Learning More

By
Samantha Rose
Samantha Rose covers financial literacy for the educational arm of OppLoans. Her work focuses on providing hands-on resources for high school and college-age students in addition to their parents and educators.
Updated on April 12, 2021
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Got questions about paying for college? We’ve got answers.

College is expensive, and the price is only going up. Thirty years ago, students were paying $15,000 a year for a private university, and $3,200 for a state school. Fast forward to today and those costs have spiked: $37,000 for private schools and $10,000 for public ones. 

A college degree is a great way to jumpstart a career, but as the data show, getting one is pricey. And many students are left wondering: How do I pay for college? 

Our guide takes a comprehensive look at the many ways to offset education costs. Here’s just some of what you’ll learn:

  • The cost of in-state tuition in all 50 states (including yours!)
  • How to apply for scholarships
  • How to apply for state schools with reciprocity
  • How to establish residency for in-state tuition
  • How to reduce costs by starting at a community college and transferring
  • How to balance work and school
  • The differences between community, for-profit, public, and private colleges

Table of contents

Section 1 — Introduction

Section 2 — Community college, state school, and private school: What’s the difference?

Section 3 — College cost breakdown

Section 4 — Expert advice: William Wells and Dr. Cliff A. Robb

Section 5 — Financial planning before you get to school: How can you pay for college?

Section 6 — While you’re there: What resources do you have to help you maintain financial well-being?

Section 7 — Bottom line

Introduction

A scale that is balancing coins on one side and a stack of books on the other

Congratulations! If you’re reading this, it’s probably because you or someone you care about is interested in college. Deciding to pursue college may be the most important investment you ever make

But there’s often a financial barrier to earning a college degree. In fact, the cost of a degree has increased significantly, and only continues to rise.

According to a 2020 College Board report, over the 30 years between 1990-91 and 2020-21, the average published tuition and fees increased dramatically: 

  • From $3,800 to $10,560 at public four-year institutions
  • From $18,560 to $37,650 at private nonprofit four-year institutions

As tuition increases, so does student debt. As of the end of 2019, the New York Federal Reserve reported that outstanding student loan debt rose by $10 billion, to $1.51 trillion total. According to a 2019 report from The Institute on College Access and Success, more than 62% of graduating college seniors had student loan debt. And they owed an average of $28,950.

Overwhelmed by the prospect of paying for college? Fear not! There are plenty of paths that don’t lead to lifelong debt. We’re here to help you navigate them.

Community college, state school, and private school: what’s the difference?

An outline of a head with different direction signs placed on the inside

Wait — before you spend time and money sending out applications, determine what kind of school you want to attend. Is the best fit a 2-year or 4-year degree program? A community college, private university, or for-profit school?

Public vs. private school

It’s important to understand how different types of schools are funded. This often directly relates to the price tag. Colleges and universities are broadly categorized as public or private.

Public

Public colleges and universities receive funding from state and local governments. Ever wonder why the in-state and out-of-state costs are different? Public school tuition rates vary according to residency status within a state or region. The net costs are often lower for public schools versus private schools.

Private

There are two types of private schools: nonprofit and for-profit. A nonprofit school is run by a nonprofit organization, like a foundation or religious group. A for-profit school is run like a business to make money. 

Private colleges and universities generally don’t receive funding from the government and are typically more expensive than public schools. Carefully consider your ability to afford private school and the value of the degree.

Be wary of illegitimate for-profit degree programs. These institutions promise more debt than success. If a degree program isn’t eligible for federal aid, it likely doesn’t pass federal standards for gainful employment (GE). Passed in 2015, the federal GE regulation aims to hold for-profit degree programs accountable. The regulation sets minimum standards for graduates’ debt-to-income ratios.

In fact, only about 60% of programs at private nonprofit institutions would pass the gainful employment test. Public institution programs are slightly higher at about 70%. 

Four-year colleges and universities

Students who graduate from four-year institutions earn bachelor’s degrees in art — like political science, literature, and music — or science, such as physics, geology, and engineering.

Students at these schools tend to start their coursework immediately following high school. Most live on campus.

Two-year colleges 

Two-year colleges are also called community, junior, or commuter colleges. Students who graduate from two-year institutions earn an associate’s degree. An associate’s degree might be sufficient for certain career paths, such as nursing. In other cases, it’s a starting point for transferring to a four-year college. 

There are key social differences between two-year and four-year schools.

  • More students tend to live off-campus at two-year schools. 
  • The student population tends to skew older than 18- to 22-year-olds at two-year schools.

Note that two-year colleges are different from career, vocational, and trade schools. Students focus on skills for specific professions, but they don’t earn an associate’s or bachelor’s degree.

College cost breakdown

Bunk beds in a dorm room

Types of costs

Several factors determine the total cost of college. We’ve created a handy chart to help you understand the difference between common college expenses:

College Cost Breakdown Chart

You can download a PDF of this cost breakdown chart here.

 

Published costs vs. net costs

There are two different costs to keep in mind: published costs and net costs.

Tuition and fees are included in published costs. This “sticker price” is the amount advertised to all students. Depending on the school, this may also include room and board. Published costs can be reduced with scholarships, grants, and other aid.

Net costs are the true cost of attendance minus reductions from financial aid. For example, supplies, travel, scholarships, and grants. Determine your net costs with a net price calculator. Schools that receive federal aid money are required by law to provide a net price calculator for applicants.

2020-21 tuition and fees

Here are the College Board trends in college pricing.

We’re only talking about tuition and fees, and not room and board or other costs of living. Why? Those expenses depend on the school, location, and personal situation. 

For example, students who are required to live on-campus must factor in room and board. Other students may have the option to live off-campus and commute, factoring in rent or travel costs. Take these other expenses into consideration according to your personal situation.

2020-21 average tuition and fees at public institutions by state

Most public institutions have different published costs for students in-state versus out-of-state.

Across all public schools nationwide, tuition and fees for the 2020-21 school year cost $3,770 for in-state students at public two-year schools, $10,560 for in-state students at public four-year institutions, and $27,020 for out-of-state students at public four-year institutions. However, costs vary by state, as shown by the below data collected by The College Board.

 

Public Four-Year InstitutionsPublic Two-Year Institutions
StateIn-State Tuition and FeesOut-of-State Tuition and FeesOut-of-State PremiumIn-State Tuition and Fees
Alabama$11,010$27,750$16,740$4,910
Alaska$8,590$25,880$17,290N/A
Arizona$11,880$31,230$19,350$2,280
Arkansas$9,070$22,360$13,290$3,810
California$9,940$32,150$22,210$1,430
Colorado$11,420$31,850$20,430$4,820
Connecticut$14,140$33,850$19,710$4,500
Delaware$13,600$33,400$19,800$4,950
District of Columbia$8,640$17,180$8,540N/A
Florida$6,370$22,160$15,790$3,240
Georgia$8,790$26,320$17,530$4,060
Hawaii$10,990$31,400$20,410$4,020
Idaho$8,000$25,190$17,190$4,190
Illinois$14,420$22,970$8,550$4,400
Indiana$9,780$29,640$19,860$4,960
Iowa$9,370$17,590$26,960$5,660
Kansas$9,360$23,500$14,140$3,300
Kentucky$11,000$24,810$13,810$5,610
Louisiana$9,920$19,820$9,900$4,190
Maine$10,750$28,350$17,600$3,840
Maryland$10,130$25,060$14,930$4,810
Massachusetts$13,830$30,480$16,650$6,770
Michigan$13,960$36,910$22,950$4,080
Minnesota$11,940$25,460$13,520$5,640
Mississippi$8,640$21,180$12,540$3,440
Missouri$9,240$21,400$12,160$3,910
Montana$7,400$25,980$18,580$3,850
Nebraska$9,080$23,980$14,900$3,400
Nevada$8,290$23,780$15,490$3,740
New Hampshire$16,960$31,110$14,150$7,100
New Jersey$14,380$27,000$12,620$5,430
New Mexico$8,120$22,570$14,450$1,940
New York$8,500$20,820$12,320$5,700
North Carolina$7,260$23,460$16,200$2,440
North Dakota$9,690$13,920$4,230$5,280
Ohio$11,670$26,490$14,820$5,140
Oklahoma$8,970$22,570$13,600$4,580
Oregon$11,870$33,500$21,630$5,840
Pennsylvania$14,990$28,170$13,180$5,600
Rhode Island$13,630$13,630$17,250$4,840
South Carolina$13,060$33,110$20,050$5,900
South Dakota$9,110$12,620$3,510$7,090
Tennessee$10,380$24,100$13,720$4,640
Texas$10,810$27,410$16,600$2,940
Utah$7,250$22,320$15,070$3,940
Vermont$17,510$41,610$24,100$8,600
Virginia$13,860$35,080$21,220$5,230
Washington$10,560$31,840$21,280$4,770
West Virginia$8,570$22,650$14,080$4,360
Wisconsin$9,120$25,060$15,940$4,510
Wyoming$5,790$19,530$13,740$4,310

You can download a pdf of the tuition and fees list here.

 

2020-21 tuition and fees for private institutions

Private schools’ tuition and fees aren’t affected by in-state or out-of-state variances. There are two main types of private schools: nonprofits and for-profits.

For the 2019-20 academic year, nonprofit four-year universities charged an average of $36,880 for tuition and fees, while for-profits charged an average of $15,400.

Looking beyond costs: making the right decision for you

If you’re not certain which school is best financially, there are lots of tools to help sort through options. The U.S. Department of Education’s College Scorecard compares colleges based on school type, degree program, location, and size.

Consider more than just the cost of the college. 

The College Scorecard also lets you compare schools based on other factors, like average annual costs, graduation and retention rates — which affect how long and how much money it takes to finish a degree, post-graduation salaries, and ability to pay debt.

Expert Advice

William Wells

The applicant should know three things:

1)  What is the net cost (total cost of attendance minus total grant aid) going to be, and will that remain consistent all four years? (The number of children in undergraduate college at the same time can vary from year to year, and has a significant impact on the Expected Family Contribution.)

2)  How much of the need-based financial aid will be loan and work-study, and what will the monthly loan repayments be after graduation?  

3) Does the family have sufficient savings and current income to afford the net cost? (If not, then the applicant needs to understand the long-term consequences of additional borrowing, which will accrue interest from the time the loan is disbursed.)

Dr. Cliff A. Robb

When thinking about a specific institution, it’s important to consider what it is that draws you there. Is it about a tradition connection? A family connection? A name-recognition connection? Or is it about an end goal or a career you have in mind? Having that feeling of [the end goal] is an important challenge because that’s going to impact the hours you’re enrolled and the time and money it takes to get to graduation. If you’re going to college and exploring to find out what you’re going to do, that’s okay, but it’s going to take more money to do that. Not everyone has that luxury, and as expensive as college is, it’s important to think about that [when applying to and selecting your school].

[Always] be thinking about what the future opportunities are for you. Go in mindful of why you’re borrowing, what you really need, and how it will impact you down the road. What does the job market look like given the major you’re interested in? What are your living situation goals? Where do you want to live, and what’s the cost of living for that? Borrowing decisions should match that.

A lot of people don’t think about long-term goals in the context of borrowing. They go in and sit down with a financial aid official…. And I’m not discrediting financial aid officers! There’s no fault to them; they’re doing what they can. And they’ll often tell you what they’re willing to give you, not what a reasonable amount is to take on given your situation. [It’s important to think] about the debt that loans will amount to in the long run, and how that will impact things like [your] ability to buy a house or car or travel or whatever else [you] may want for [yourself.]. That’s tough. To think about five or 10 years in the future, which probably feels kind of hazy.

Financial planning before you get to school: How can you pay for college?

A balance scale with a red background and coins on one side and a stack of books on the other

If you’re thinking that there’s no way anyone has tens of thousands of dollars to spend on school, you’re right. Very few people do.

Luckily, financial aid offers students a chance to fund their education and lower college costs.

Apply for scholarships, grants, and fellowships

Scholarships, grants, and fellowships are generally all types of financial assistance that you do not have to pay back after school. That’s right – they’re basically free money, which, depending on who’s giving it to you, can go toward anything from your tuition to your living expenses. You’ve probably heard about people getting “full rides” or all-expenses-paid scholarships to schools for either good grades or athletic accomplishments, but you don’t have to be a straight-A student or the next Steph Curry to get a scholarship. Below, we’ll talk about the different avenues you can use to find scholarships for which you qualify.

As a general note, though, always make sure you understand scholarship requirements before accepting them. Will they require you to live on campus? Will you have to pick a specific major or participate in a specific type of activity to keep them? Can they cover costs of living or just tuition? Also, scholarships are competitive, so apply strategically to maximize your chances of winning.

Explore the financial aid and resources at your schools of interest

Many colleges and universities have their own scholarships and grants. As the University of Michigan’s Assistant Director for Financial Wellness Kristin Bhaumik notes: “[Our students are] automatically considered for merit-based scholarships [without applying for them]. It’s important to remember that not every school does it that way, though, so it’s important to make sure you look into the process at your particular institution and [consider other outside options] when conducting a scholarship search.”

It’s key to figure out whether they consider you for merit-based scholarships automatically when you apply to go there, or if you need to figure out what opportunities they offer and submit scholarship applications in addition to admission applications.

Apply for scholarships, grants, and fellowships from outside of your school

If you’ve already applied for scholarships and grants through your university, there are plenty of other options outside of your school. Consider the following sources for additional scholarship, grant, and fellowship opportunities:

Federal Grants

Each year, the U.S. Department of Education awards over $120 billion in grants, work-study funds, and student loans to more than 13 million students. While we won’t cover work-study or loans here, it is important to remember that financial aid includes these.

You can find an overview of the grants available through the Department of Education and other federal partners and how to apply for them on the Federal Student Aid website. In general, look into whether you qualify for opportunities like the following:

  • Federal Pell Grants
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Teacher Education Assistance for College and Higher Education (TEACH) Grants
  • Iraq and Afghanistan Service Grants
  • Educational and Training Vouchers for current and former foster care youth
  • Aid for serving in the military or for being the spouse or child of a veteran

Websites

Websites can help you sift through large numbers of scholarships for the ones for which you actually qualify. Remember to seek out scholarships geared toward people with your experiences and interests. For example, some scholarships are focused on specific fields of study or are set aside for students who are returning to school after having taken several years off of school.

Learn more about searching for scholarships at sites including:

Beware — online opportunities are full of scholarship scams. Remember, you shouldn’t have to pay to access information about scholarships.

National organizations, local organizations, and professional associations

Bhaumik talks about thinking about searching online for scholarships, but also about thinking more closely to home. 

“We talk about thinking broadly and thinking creatively,” Bhaumik said. “The College Board has a wonderful [scholarship] search tool out there, but we talk about looking around in your own locality – your own network of family and friends, organizations you may be affiliated with.”

Local foundations, nonprofit organizations, religious or community organizations, and businesses may have scholarship opportunities for which you’re eligible. Think about organizations you or your family and friends are affiliated with, and get in touch with them to see what they have available.

National organizations like Rotary and Kiwanis may have local chapters through which you can apply for standard scholarship opportunities that are available anywhere, or they may have special programs just for your region.

Professional associations for the field or major you hope to enter may also be able to help you financially.

While many of these organizations may offer funds for smaller amounts than what you’ll need to pay for all of college, remember that these can add up, and that even a few hundred dollars here and there is way better than nothing.

Pay out of pocket

If you can afford to pay cash for at least part of your college tuition or other expenses as you go, that is hands down your best bet to minimizing debt.

Even if you don’t have several tens of thousands lying around to go toward your education, you can save a little at a time in advance – which adds up! – through 529 plans, and you can plan to work at least part time to offset your costs of living.

529 plan

A 529 plan, or a “qualified tuition plan,” is a type of savings plan specifically designed for saving for college. Every state, including Washington, D.C., sponsors at least one 529-plan option. There are two main types: college savings plans and prepaid tuition plans.

College savings plan

College savings plans are savings accounts set up for a specific student. You or someone in your family can set one up for you at any time before you go to college. The account holder can pick different investment options for the account, and the funds within it can only be redeemed at any institution for “qualified higher education expenses,” which include tuition, room and board, mandatory fees, books, and other required equipment. You also get a tax break because earnings in these plans are not taxable as long as they’re redeemed for educational expenses.

Prepaid tuition plan

Prepaid tuition plans allow you to buy tuition credits at eligible public and private schools for future enrollment in those schools. The price you pay is generally the current tuition price for that school, and it’s locked in, meaning that even if tuition increases before you get there, your prepaid price is valid. As we saw earlier, the price of education keeps increasing, so if you can afford to buy a credit here or there in advance of getting to school, this could save you a lot of money in the long run.

There are some other key differences in these plans, so if you want to start one, make sure you understand what you’re signing up for and pick the best one for you.

Take out loans

If you don’t have the cash to pay for school upfront, and if scholarships don’t quite cut it, either, loans are a great resource that you can use to pay for everything from tuition to rent to travel expenses. Loans are money that you borrow for school and have to pay back – usually with interest. While it may be intimidating to think about borrowing as much money as you’ll need to pay for school, and to navigate the world of loan types, interest, and repayment, don’t worry – we’ll walk you through it!

We’re going to talk mainly about federal loans, which are public loans made by the U.S. government, but first, let’s go over the difference between public and private loans.

What’s the difference between private and public loans?

The main differences between public and private loans are who pays for them and, in turn, what they expect you to pay them in return for loaning you money (i.e., interest). Public loans are paid for by government entities. The most common public loans are from the U.S. Department of Education, but we’ll get to that in the coming sections. Private loans are made by institutions  that are not affiliated with the government. They may be private nonprofit organizations (e.g., philanthropies or foundations) or for-profit organizations (e.g., banks or loan companies).

This handy Federal Student Aid chart explains these differences:

Federal Student Aid Chart

You can download a PDF of this Federal Student Aid chart here.

 

Robb offers some insight into how you may want to think about the differences between public and private loans.

A lot of people have to turn to private loans when public loans don’t cover everything, but it’s important that they fully grasp what that means for them in the long-term. Whereas subsidized federal student loans have favorable rates and give you a nice timeline to pay them back, repayment structures for private loans may not be as gentle. You see a variety of interest rates and payback timelines. While neither public nor private loans go away, the terms of public loans are fairly favorable for consumers. In the private market, you have to be a lot more savvy with what you’re giving, and you have to be cognizant that you’re stacking more debt on top of their debt, and you can end up with some heavier future payments.

A college graduate with a price tag hanging off his hat

Why should I take out loans?

Your college education is probably one of the most important investments you’ll ever make. Most people don’t have the money in their bank accounts to pay for college outright, so loans offer a way for you to get the degree – and, ultimately, the life – you want.

What kinds of federal loans are available?

The Federal Student Aid website contains helpful overviews about different federal loan types. There are three main types for undergraduate students:

  • Direct Subsidized Loans: loans for eligible undergraduate students who demonstrate financial need.
  • Direct Unsubsidized Loans: loans for eligible undergraduate, graduate, and professional students, regardless of financial need.
  • Federal Perkins Loan Program: a school-based loan program for undergraduates and graduate students with exceptional financial need.

Each of these has different eligibility requirements, interest rates, and maximum loan amounts per year, so be sure to explore the Federal Student Aid website or talk to your school’s financial aid office to make sure you understand.

How do I know if I’m eligible for federal loans?

There’s a handy tool called the FAFSA4caster on the Federal Student Aid website that can help you get a pretty good indication of whether or not you’ll be eligible for federal student aid.

How can I apply for federal loans?

The good news is that you use the same form every year to apply for federal loans, regardless of which school you go to (well, unless your school doesn’t qualify for federal aid). It’s called the Free Application for Federal Student Aid (FAFSA) form, and it’s the only way to get federal loan money. It may be intimidating to fill out the first time, but the instructions on the FAFSA website make it much easier.

You should never pay to fill out the FAFSA form. Additionally, Akeiva M. Thomas, founder of The Bemused, recommends filling out the FAFSA no matter what, even if you think you won’t qualify for aid: 

This might seem obvious, but you would be surprised at the number of students who make misguided excuses for not filling out the FAFSA. One common belief I hear is that the student believes they or their parents make too much money, so they don’t qualify for aid. Filling out the FAFSA never hurts. In fact, some schools require you to fill out the FAFSA in order to qualify for institutional aid. 

Also, if you or your family experience a significant change to your financial situation, such as a job loss or unusual circumstance, financial aid administrators have the ability to make what’s called a professional judgment on a case-by-case basis, whereby they can manually adjust your need, sometimes resulting in more financial aid for the student.

Filling out the FAFSA helps to keep your funding options open.

How much money should I take out in loans?

Responsible borrowing is key when assessing your financial aid package. Remember that when you take out a loan, you’re entering into a legally binding contract to pay that loan back in full, and you do not have to accept all of the loans offered to you. Take the time to do the following to borrow responsibly:

  • Budget out what you will actually need for the college costs outlined earlier (tuition, room and board, etc.).
  • Figure out what your anticipated salary will be after you graduate. If you want to search by occupation, check out the U.S. Department of Labor’s Occupational Outlook Handbook.
  • Calculate what your estimated monthly loan repayment will be after graduation given the amount you’re taking out. You can estimate your loan repayment using the Federal Student Aid website’s Repayment Estimator tool.

Loans usually come with interest rates, so be sure to understand what those rates are and when they start to add up for the loans you take out. Are they subsidized or unsubsidized loans? Federal subsidized loans don’t accrue interest until after you’ve finished school. Unsubsidized loans start to rack up interest as soon as you take them out. The answers to these questions combined with your estimated budget will help you determine what’s right for you.

While entering into a legal contract to borrow more money than you’ve ever made can be scary, just remember: If you are smart about borrowing the right loans in the right amounts, you’re setting yourself up to be just fine. (And if you’re still freaking out about it, check out this video from the Federal Student Aid website on responsible borrowing.)

Are there any special programs to help me pay back my loans?

Yes! There are especially if you’ve taken out federal loans.

First, when you’re figuring out how to start repaying your loans after you graduate, make sure you understand the different repayment plan options that suit your loan type, loan amount, and income level. The plans range from the Standard Repayment Plan, which has a fixed payback for a set amount of time, to a number of plans that vary over time, based either on a set amount increase or your income and other circumstances.

Second, if you have a bunch of different loan sources, you can use Direct Consolidation Loans, which allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer. This will save you from having multiple payments to multiple entities per month.

Third, check to see if you’re eligible for any of the federal loan repayment programs:

  • The federal Public Service Loan Forgiveness Program. If you work for a qualifying employer (generally, if you work for the government or a nonprofit) and make 120 months (that’s 10 years straight) of federal loan repayments on a qualified loan repayment plan, the rest of your federal student loan debt is 100% forgiven. That’s right: Whatever you have left to pay is essentially paid for you by the government.
  • The Teacher Loan Forgiveness Program offers up to $17,500 on some types of loans after five consecutive years of full-time teaching in certain districts. See the website for specifics and qualifying posts.
  • The U.S. Department of Health and Human Services offers repayment programs for people who pursue specific professions or programs.
  • Indian Health Service
  • National Institutes of Health
  • National Health Service Corps

Finally, note that some employers may offer you loan repayment as part of your benefits for working for them after graduation. Keep that in mind when applying to work for different companies and organizations, and keep it in mind as a potential part of your salary negotiation for your first job – or any job – after you graduate.

Apply to public schools in other states with reciprocity

In some states, there are reciprocity programs through which you can get in-state tuition at another state’s public universities. To find out if a school you’re interested in attending has reciprocity with your state, that school’s website will be your best bet. The National Association of Student Financial Aid Administrators also lists some state and regional financial aid discounts on their site. You can even search by state to see what financial aid programs exist in your state.

Establish residency in a state to attend a public university at the in-state tuition rate

If you want to go to a state school in a state other than the one in which you live, and if that school does not have reciprocity with your state, you do have the option to move to the state of the other school and establish residency to be eligible for in-state tuition. This isn’t usually an easy process, but it is possible.

The requirements for what constitutes “residency” vary by state and sometimes by school. According to FinAid, in general, if you’re a dependent student (i.e., your parents provide for you financially), one of your parents has to be a resident of that state for a set amount of time. In most states, they must have been residents for a year, although that amount varies. If you’re an independent student, you have to have been a resident of that state for a set period of time (usually around a year) before you qualify for in-state tuition. For more information about this, check with the school of your choice to see what they require.

Start at community college before transferring to a four-year institution

If you really want to get a bachelor’s degree but have no idea how you could possibly pay for it, enrolling in community college for 2 years before transferring to a 4-year college can help you cut the cost of a bachelor’s degree significantly.

Robb agrees: “Students and families should be very open to alternative models that are different from the traditional viewpoint. [They should consider the concept of:] Do you really need to go to X university and do a four-year degree? Or can you go to a two-year school and transition to a four-year model? The option to go to a community college and flesh out that core coursework like math and language and science before matriculating to a bigger university at a higher cost can save a ton of money.”

Do you live in a state, city, or region with free or significantly reduced-price community college?

These places exist! Starting with the class of 2016, for instance, Chicago started its Star Scholarship program, through which public high school graduates with at least a 3.0 GPA and completion-ready math and English scores can go to any of the city’s community colleges at no cost – with tuition and books provided for free.

As of June 2017, Tennessee has extended their free college program, Tennessee Promise, to serve graduating high schoolers and every adult without a degree. Several other states (New York, Oregon, Rhode Island, Indiana, Montana, Minnesota, Kentucky, Nevada Washington, Alabama, and Arkansas) and specific regions or cities (including Pittsburgh, PA; New Haven, CT; Kalamazoo and Detroit, MI; Oakland, CA; and Tulsa, OK) have either started to offer free community college or are working on plans to do so for select students.

Are there transfer pathways at local community colleges specifically for students like you who are interested in that path?

Even in states where community college is not free for everyone, there are programs specifically for students to enroll in two-year institutions to save money before finishing four-year degrees at other schools. 

For example, in Ohio’s Preferred Pathway program at Columbus State Community College, where students start for two years before transferring to one of nine public and private universities to complete bachelor’s degrees, 76% of students took on no debt in the 2015-16 academic year.

Live with friends or family off-campus to curb room and board costs

If you have the ability to live with family or friends, consider this option to save money on cost-of-living expenses like room and board or rent. It adds up quickly to be living rent-free or nearly rent-free, and it can be a highly effective way to free up resources to go toward other things, like paying for more tuition out-of-pocket and taking out fewer loans.

Save money on textbooks by borrowing, renting, or buying them used

Depending on your course load and program of study, textbooks can add up. Save money by checking them out of the library instead of buying them. It may take a little more time to get your book lists from professors early enough to locate them at your school’s library or request them through interlibrary loan, but your bank account will thank you every semester.

You can also rent books for the semester at much lower prices than buying them. A quick Google search will give you a whole array of possibilities from sites like Amazon, Chegg, or CampusBooks.

Alternatively, if you need to buy your books, consider looking outside of your campus bookstore to online marketplaces like Amazon, Chegg, Barnes & Noble, or CampusBooks to ensure that you’re getting the best deal possible on new or used copies.

While you’re there: What resources do you have to help you maintain financial well-being?

Two cellphones with dollar bills floating between the two screens

Your school’s financial aid office

Your school’s financial aid office is there to help you and your family with everything from applying for aid to budgeting for your day-to-day life. Bhaumik says that the two main conversations her office has with students can be separated into two broad categories: maintaining financial wellness by minimizing costs with good choices and by being financially savvy:

We do a lot of counseling around budgeting, reasonable lifestyle expectations while students are in school, and techniques to minimize expenses [and] maximize student experience from a budgeting perspective. I think that the education piece of it has to be part of the conversation when we’re talking about costs for higher education. A lot of our energy is dedicated to educating students on those types of costs as well. The financing education perspective… is a different stream of conversation. We work with families to understand and talk about all of the resources they can explore to get assistance for their education. We start with conversations about the federal aid application and any institutional aid applications. We talk about special circumstances that may impact a family’s ability to pay. We talk about scholarships and scholarship searches. We believe in small scholarships and believe that they can add up, and loans can be an important resource for families that otherwise don’t have resources to pay for education. That pivots us back to the education conversation – reasonable expectation of what it’s going to cost you as a student.

In addition to meeting with financial aid advisors, William Wells, the Director of Financial Aid at Wake Forest University, recommends that students become familiar with the financial literacy tools on his office’s website, too.

Federal Student Aid website

The Federal Student Aid website includes a number of resources that are worth exploring, including pages dedicated to lowering the cost of college, defining the types of financial aid, tips for filling out the FAFSA form, and suggestions for finding scholarships, among many others.

Bottom line

A paper shredder that is shredding a paper labeled DEBT.

There are resources available to help you leave college debt-free. Leverage financial aid, nontraditional college pathways, and the power of saving.

To recap, here’s how to do it:

  • If you’re thinking about college, start saving now.
  • Think about what you want out of your education. Decide which school to attend. Cater your college search to those goals.
  • Understand the full cost of college beyond tuition, then budget and borrow responsibly.
  • Remember that you have resources at your disposal to help you along the way — from a financial aid office to the internet.
Article contributors
Cliff Robb

Dr. Cliff A. Robb is the associate professor and faculty director of consumer finance and financial planning at The School of Human Ecology, University of Wisconsin-Madison.

Akeiva Thomas

Akeiva M. Thomas is a certified financial planner and certified public accountant. She also holds a master’s degree in financial planning. Thomas has a passion for helping young people like herself build wealth and has a particular interest in college funding and student loan planning. She spreads financial literacy through her YouTube channel, The Bemused

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