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How To Pay for College without Student Loans

Today I wanted to talk about paying for your university studies on a pay-as-you-go basis, without the need of a student loan or some miracle from the direction of the FAFSA program. I’ll warn you: this is going to involve immediate self-sacrifice and hard work.

The good news is, if you follow my advice, this can be done. It’s realistic and the plan has been executed by others. In many ways, these are old-fashioned notions which require you to sacrifice your time and energy right now while building for the future.

When you’re done, you’ll save tens of thousands of dollars in paying off the college loans over the next years, while Mom and Dad won’t have to raid their retirement to pay your way through school. When you graduate, you’re free-and-clear to start a career without that ridiculous payment schedule which starts 9 months after grduation.

But first, I want to address the price of being a university scholar in America these days.

Education Costs Rising to High Heaven

College Students Studying Together

The Idyllic Campus Life Is Still Attainable, If You Get the Right Financing in Place.

The rising costs of tuition are simply outrageous. A bit like health care expenses, the price of a postsecondary education in this country is rising at a cost far beyond standard inflation.

That’s a problem the American people have to look at in the years to come. We’ll have to find solutions to arrest the pricing increase, or at least keep it more in line with the rest of our rapidly increasing price of living.

Work Thirty Hours Per Week

This is going to sound like anathema to the undergradate student. You parents reading this might think it’s going to hurt your son’s or daughter’s education to work their way through university, but it won’t. Studies show that people who work during their college years have a higher GPA than those who don’t work. Something about having a rigid schedule, or knowing the value of money, or the work that goes into paying tuition motivates the working undergraduate to get better grades.

30 hours per week sounds like a big total, but it’s not as much as you’d think. This is on-average, so it doesn’t take into account the 3 months in the summer you can be working 40 hours and the 1 month in-between semesters you can be doing the same. That’s 1/3rd of the year where you get 43.5% of the working out of the way. (52 weeks by 30 hours equals 1,560 work hours, while 17 weeks by 40 hours equals 680 work hours, equalling 43.5% of your year’s working.) The rest of the year, you’re working 25 hours per week. Since you can do a good amount of that on the weekends during the school year, you really aren’t taking away from your study hours that much.

What I’m talking about is putting aside your so-called social life or college party time to work your way through school. Don’t get me wrong; college is a time to make lifelong friendships and career contacts. You need to socialize in school, but you can do that through joining organizations, study groups, and taking the time to meet your professors. Also, you’ll meet plenty of people through your job, especially if you take time to find a job which allows you to network. Many professors need assistants for many things you can help with. Finding a job like that is going to provide a better chance to meet and get to know interesting and helpful friends. Use your postsecondary career to make contacts, but these contacts don’t all have to be met over a beer bong.

When you work thirty hours per week, you’ll be able to pay for most of the price of higher education through a steady job (or a couple of less-steady jobs) alone. Use the following supplements to put you over the top.

Save on Everyday Expenses

It’s amazing what so many of us spend every day on fluff. We pay $1.49 for bottled water. We pay $3.50 for a cup of coffee. Buying a package of gum costs another dollar or two. By the time most people have gotten to work in the morning, they’ve spent $5 on nonsense they could well do without.

You could brew your own coffee for a fraction of the cost. Get a filter at the house and you have the same exact thing as you get in the water bottles. (I know. Many years ago, I worked for a major cola bottling company and their bottled water was nothing more than filtered water from the city of Mesquite, Texas.) Buy the gum if you need it, but chew one piece at a time–many people chew two.

Assume you spend $3.00 extra per day throughout the work year. If you have 50 weeks of work (accounting for vacation) and a 5 days a week, you’ll save $750.00 per year that could go to your child’s advanced education. If a parent wants to make a sacrifice for their children’s education without raiding their IRA or 529(b), just stop drinking bottled water and gourmet coffee. That’s it. Your child can do the rest.

American Opportunity Tax Credit

The two sides haven’t entirely been in gridlock these past 4 years. A few initiatives have had bipartisan support and been passed by President Obama and the Congress. The American Opportunity Tax Credit was passed in 2010. This tax credit provides $2,500 a year for parents who spend at least $4,000 on educational expenses that qualify under the program.

If you’re a student who wants a little help from skeptical parents, tell them all they need to provide is $1,500 per year. Then present them with the numbers: pay $4,000 and you get $2,500 in tax credit at the end of the year. Remember, this is a full tax credit–not a tax deducation. They can write over 62% of their contribution to your education.

Pay Monthly

Spread the cost of you higher education out over the course of the year by paying monthly. Most colleges offer this option with no interest fees charged. You’ll probably need to pay a one-time setup fee of about one-hundred dollars. Otherwise, you’ll be able to pay for university scholastics like you would a car payment or credit card bill, every month on the month. Ask your school’s bursar’s office or financial aid department about installment plans. At your average universities, you’ll be paying about $1,200 per month for four years, unless you can do it in less time.

Go to School In-State

If you plan to educate yourself at a public university at your own expense, only consider attending a school in your home state. Tuition is three to four times more at public universities for out-of-state students. You might think the degree programs in your major are so much better in the next-state-over, but you’ll be able to get a degree which is plenty respectable and useful by going to the big public universities in your home state. It’s a myth that you need to find specialized programs.

It might not be as adventurous or romantic to stay in your own native state, but you’ll meet plenty of new people at whichever alma mater you choose. If you really want to get out of your hometown or out of your parents’ verge, choose a good school on the other side of the state. You might find staying nearer to home isn’t a bad idea, anyway; it makes visits on holidays much easier.

Remember, if you have to take out a student loan to attend college, the difference in pricing isn’t 3x or 4x the amount you would pay in-state. Over the course of the next decade or two you’ll be paying down the college loan, the difference is likely to be twice that amount. You might end up paying 8x to 10x what you would be spending on your state university. The difference isn’t worth it..

Graduate in Three Years

For those who want to get on the fast track to a career, you can graduate college in 3 years if you take the maximum course load every semester and then take courses at a local junior college in the summer (for a total of 4 extra JC courses per year). You can do the same at your university, but junior college coursework tends to cost about 1/3 as much. Just be sure that these classes fit into your degree plan and your major program accepts the hours. If so, you can take many of these online through their distance learning programs, studying around your increased work schedule and without additional gas charges.

This final option isn’t for everybody, because it does increase the intensity of your academic career. But if you want to get out with the least expense and get into the workforce as soon as possible, graduation could only be three years away. You see an occasional pro athlete get drafted who’s touted as having graduated in three years (Robert Griffin III of the Washington Redskins), so if RG3 can win a Heismann Trophy and get his degree in three years, you can do the same (without the national awards).

Wait to Buy School Supplies

On a more tactical level, only buy the basics before school starts. Once you’re about two weeks into the semester, make a list of items you need for everyday living in your dormitory. You’ll notice the essential things missing by that time and have a firm understanding of what’s really needed.

Take the cash you saved not over-shopping before your studies began and make a trip to get supplies with the list you made. That way, you don’t buy a bunch of needless things

Tips to Save Money on College Expenses

If you feel like you still need more ideas for saving during your postsecondary studies, Kym Gable of KDKA News in Pittsburgh filed a report in which experts gave their suggestions.

The report suggests that aspiring scholars should consider the daily necessities that are going to help you prosper once you’re living on campus: products that help with better organization and making better lists. This might be small products like desk organizers or big products like a desk for your dorm room, so you don’t have to go out into semi-social locations (like the library) to do your studying. Avoid as many distractions as possible.

Also, take a look at the good deals and promotions that retailers offer. Retail stores like IKEA, Office Max, Staples, Target, and Best Buy have partnerships, promotions, and downloadable apps to help students save money. Each of them also have their own college registry programs.

That’s right; you can sign up for a Target college registry. Plan ahead when it comes time for high school graduation. Sign up for college registries at any participating retail outlets and have your friends and family buy some of your college materials when they give a high school graduation present. You’ll get more use out of the gifts and your loved ones are going to feel like they’re making a real, helpful contribution to your future.

Getting a Degree without a Student Loan  

That’s all you have to do to graduate without a crippling student loan debt at the end of the process. Even in today’s overpriced postsecondary educational system, it’s still possible to work your way through school they way they did it in the old days. It’s going to take dedication, hard work, energy, smarts, and a good, well-executed game plan, but it’s possible. The great thing is, in the end, it’s far less work than what you’ll have to do paying off college loans.

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