This “Ways How to Pay for College Without Student Loans” provides the readers an overview about how to pay for college and some strategies that may work for them.
Whether you’re a parent or a potential student, the cost of college loans can be scary. Based on the most recent statistics from the College Board, the average cost of tuition and fees at private college is $34,740 at private college and universities in 2017-2018.
The Cost of College, With or Without Loans
On average, the cost of a state school will run you $9,970 per year, if you’re an in-state resident. And these stats don’t even take into account the additional costs of room and board, books, and living and transportation expenses or if you’re an out-of-state resident attending a state school.
If you have a modest or even high family income, those figures can keep you up at night. How will you pay for an added $1,000 – $4,000 per month in expenses when you already have bills to pay?
You might be wondering how to pay for college. Or, the alternative, how will your student fare when saddled with tens or hundreds of thousands of debt to pay back after graduation?
If you’re paying for college as a student yourself, you might discard the idea of education altogether, just because it’s inconceivable that you could pay for college without substantial student loans.
I feel your pain. Even though my husband and I value education, have been saving some money for our son’s college, the cost is so exorbitant that it is so hard to conceive. If you’re purchasing a car, you generally know the sticker cost of the vehicle you’ll be buying. You can set a budget, save for it, and purchase the item with cash if you don’t want a loan. If you need a loan, you can get one comparable to someone else with your debt load or credit score.
Start the College Planning Process Early
Planning and hard work is a critical component of college planning, starting from as early as preschool.
A lot of parents find some help with the planning process of college with CollegeBound Plans. This program helps families craft an academic plan for their college bound kids, helps with access to scholarships and tuition discounts, and even helps kids find tutoring resources. CollegeBound Plans is a one-stop shopping resource for families who know they want their kids to go to college, but don’t feel like they have enough experience to navigate today’s tough college market on their own.
Paying Tuition Without College Loans
But the cost of a university education is different. It fluctuates, depending on a wide range of factors. Schools take your family income, your child’s income, the money you contribute to retirement savings, your age, your child’s grades and test scores, and a whole host of other factors into account. The availability of the university endowment for that particular year or whether your child gets scholarships from other sources may also come into play when determining the actual price you’ll pay.
So, even though my son is a junior, I’m not sure at all how much we’ll be paying in a few months. I don’t know whether a private school or state university will be a better choice for him. And I probably won’t have a clear sense until about 6 months before he leaves – when he makes his final college choice. At that point, checks will need to be written – or, what I’m hoping to avoid – loans will need to be taken.
Fortunately, there are a few things we can do as a family to help reduce the budgetary pain and the likelihood that he’ll need to take out federal student loans.
- Start an Educational Savings Account. Even before your child is born, you can start an investment educational savings account, such as a 529 or Coverdell account, to save specifically for future education expenses. Depending on the state you live in and the state that administers your plan, there may be tax advantages for these accounts. You can start one for any children in your family, and generally, they can be used for any type of future schooling, including community college, graduate school, or even technical schools. Saving this way is great, because you can set it and forget it – and even a small amount – adds up after 18 years. We started a 529 when my son was under two, adding only small amounts every month but now that he’s a junior, it’s really added up.
- Students, Put Aside Money Every Paycheck. You probably have bills to pay, but saving even a $100 every month from your paycheck can help pay for some of your expenses during college. Start a special fund specifically for college savings and put some money away with every paycheck.
- Craft a High School Plan for Success. If you or your child is heading to high school, pick courses that are challenging and prepare him or her for college. Even freshman can choose extracurriculars and start a portfolio of volunteer work that will increase the chances of scholarships. For every scholarship your child receives is less student loan money that he or she would need to pay back.
- Start Your Scholarship Search Early. There are tons of scholarships available to students, even if you’re not the valedictorian or have racked up 1,000 hours of volunteering. You can get scholarships based on:
- Extracurricular participation, such as Boy or Girl Scouts, 4H, or sports
- Writing ability (by writing essays)
- The school you attend or plan to attend
- Your parents’ military service or workplace affiliation
- The college major you plan to study
- And lots more
During your senior year, your high school guidance counselor may give you information about specific local scholarships you can apply for. Toward the end of your junior year, start your scholarship research and create a spreadsheet of deadlines, scholarship amounts, and more for national and state scholarships. Begin gathering letters of recommendations from teachers, bosses, and other adults so you have them ready once you begin scholarship applications.
There’s a book I love called Confessions of a Scholarship Winner that goes into great detail on getting free money for college.
- Use the Net Price Calculator to Calculate Costs. It’s easy to fall in love with a beautiful campus or a cool social scene, but if you have to saddle yourself with significant student loans, a school might not be the right choice. To help you get a handle on the true cost you’ll be paying at a particular school before you apply, google “Net Price Calculator” and “[Name of School/university]”. You’ll have to answer a few questions about your parents’ income and savings, your grades and test scores, and your income and savings, but the calculator should help you form a more accurate picture of the total cost of attendance, including tuition, room and board, and fees, as well as the financial aid you might be eligible for. If you know that School A will require a lot more student loan debt than School B, you can make a more informed choice.
- Start a Survey Side Hustle. Want to start setting aside money for that first year of expenses? A side hustle can add a little extra to your budget every month. I like surveys for side hustles, but a lot of survey companies will sell your personal information and may only pay in gift cards instead of cash.
One reputable survey company I’ve used is Swagbucks. It’s free and takes just about a minute to sign up. Once you do, you’ll get a welcome email.
Simply log in to Swagbucks, click on Answer in the left sidebar, and find a survey to answer. Take a few surveys, let the money roll into your account, and designate it for college savings.
Another site I’ve used is SurveyJunkie. After a quick signup, you’ll be asked to give your opinion – and just like Swagbucks, it’s completely free.
The best way I’ve found to make an extra $100, $500, or more each month is to block out a few minutes every day to take a few surveys. This is just extra money that I can add to my son’s college account!
These strategies might not completely erase your need for federal or other student loans. But every little bit you pay cash for is that much less that you have to borrow.
How are you helping your child fund college expenses without student loans? Share your strategies in the comments!