Are you worried about how you’re going to pay for your college education or afford to send your kids to college? There is good news for you. A college education does not have to be a debt trap. Here are options for paying for college without taking out loans – FAFSA: how to pay for college without a loan.
Whatever path you take to college, it will be costly. And paying for it has become one of America’s most pressing economic issues. Do you give up the dream of sending your child to college, potentially limiting their future opportunities? Or do you do the “normal” thing and take out student loans to give them a better chance at a good job?
In 2018, Americans owed more than $1.48 trillion in student loan debt. The monthly average student loan payment is $351. Those figures alone should persuade you to do everything you can to avoid taking out student loans. This may appear to be impossible, but it isn’t.
At the very least, implementing some of these ideas can help you reduce the amount of debt you incur to pay for school.
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Why Are Student Loans a Bad Investment?
I understand—you’re willing to go to any length to ensure your child’s success. But all too frequently, I hear from people who wanted the dream so badly that they went into debt to make it a reality. That is a huge error. What I want you to realize is that the “borrow money or skip college” dilemma is a mistake.
You are not required to do either! The truth is that there are many ways to get a good education and a good job without borrowing money. Make contact with a qualified investment professional who can assist you in developing a college savings plan.
Take it from someone who frequently speaks with people who are deeply in debt due to student loans: If you think you’re stressed out about money now, wait until you experience the stress and pain of student loan payments. Consider the massive financial burden that today’s college borrowers and their parents who cosigned for them face:
- The Federal Reserve estimates that Americans owe $1.6 trillion in student loan debt.
- In 2020, the average student debt per graduate reached a new high of $38,792.
- Currently, there are approximately 44 million student loan borrowers in the United States.
- Repaying student loans can take anywhere from 10 to 30 years, depending on the repayment plan and loan amount.
Wait a minute! Paying off the loan could take 30 years. It’s no surprise that some families are reconsidering student loans or college altogether. Debt may be considered normal, but it has a habit of sticking around for much longer than you expect. Going into five-figure debt to start a career is not a good way to give your child a chance at long-term wealth building.
The good news is that your children can graduate debt-free and ready to succeed. There are numerous non-borrowing options for funding a degree or training for an exciting career. So, if you’re worried about how to pay for college without taking out student loans, let’s take a look at your options.
Top 12 Ways on How To Pay For College Without Loan
Below are the 12 steps on how to pay for a college education without a loan (FAFSA):
1. Prior to Attending College, Save Money
Going into college with some money in your account is obviously one of the best ways to graduate debt-free. If you can pay for even a portion of your degree in cash, you will incur less debt. A 529 account is usually the best place to put your money when saving for college.
More information on this and other college savings options can be found here. But the most important thing is to begin saving as soon as possible.
2. Apply for Financial Aid
Everyone who wishes to attend college must complete the Free Application for Federal Student Aid or FAFSA. That is simply the form that schools use to determine how much money they can offer your child for attendance, as well as what types of aid you are eligible for.
Here are a few facts to consider:
- The FAFSA is a form that you or your child must fill out every school year.
- It covers federal grants, work-study programs, state aid, and school aid, all of which I recommend. (It also includes loans, which are a bad idea.)
- Everyone should complete the form. There is no income limit for receiving financial aid, so you never know how much your child will receive until you apply.
- The FAFSA does have a deadline that varies by state and school, so have your child check the official FAFSA website (as well as the website of their potential college) to see when the form is due.
- Because your child can continue to receive financial aid throughout college, they should complete the form each year.
Depending on your financial situation and the schools you are considering, your child may be able to cover the entirety of their education through grants and/or aid from your state or the school itself. Grants will be discussed further below. For the time being, keep in mind that all financial aid is only awarded to students who complete their FAFSA.
3. Apply for Grants and Scholarships
Free money is also a good idea. Thousands of scholarships and grants are available to apply for online. Local scholarships and grants can also be found at your local library. Small local groups frequently award $250 or $500 scholarships, and the applications are not always competitive. Even if you only invest an hour or two in these applications, the payoff could be substantial!
Bottom line: Apply for as many scholarships and grants as you can, as long as they match your high school record, abilities, and future plans. But don’t waste your time applying for scholarships and grants that you aren’t eligible for. That time would be better spent working so you can finish step one.
4. Choose Wisely an affordable school.
If you asked friends or neighbors what the most important factor was in choosing a school, you’d get a variety of answers, such as name recognition, dorm size, or the success of the football program. But here’s the truth: when it comes to choosing a school, the only thing that matters is whether or not you can pay for it without taking out student loans.
Finally, your top priority should be to find a school that you can afford. This may imply adjusting your (or your child’s) expectations of attending a particular dream school. FAFSA: How To Pay For College Without Loan.
On the other hand, if you can find enough scholarships, grants, and other aid to make it happen debt-free, your dream school may still be within reach. I’m not here to tell anyone not to pursue their dreams. My goal is to persuade you that paying off your debts should be your top priority. If I have a choice between a full ride at State U and a $50,000 loan to attend a private university, I’ll take State U every time.
The key point here is to apply broadly to various schools. Try some local schools with lower sticker prices, which we’ll discuss in a moment. Consider more prestigious and expensive schools as well. The schools should then be compared based on their actual cost after non-loan financial aid is applied.
After that, select a school that is both affordable and has a strong program in your field of interest. Remember that future employers don’t care as much as you might think about which school your degree came from, as long as you took the right courses and excelled in your program.
5. Go to community college first: FAFSA: How To Pay For College Without Loan
If those offers aren’t enough to make college truly affordable, consider taking your first two years at a community college. Many of these local schools provide a good education at a low cost. And they’re getting better by the year at ensuring that their credits and degree programs transfer to more prestigious institutions.
If you can pay for a community college with cash, and especially if you can live at home for the first two years, you will be able to save more money for your final two years at a larger state or private school.
6. Look into Alternative Schools
For the first couple of years, a community college is a good option. If you want to pursue a more technical career, you might find that a community college is all you need to get started. Alternative schools can be a good option even if you want to pursue a more academic career. Consider enrolling in a directional school. These are schools whose names indicate where they are in the state (central, north, south, etc.).
These schools are less likely to be research schools, where a significant portion of staff time and school funds are spent on research and publication. Instead, they increased classroom resources. They are less expensive while still providing an excellent and well-respected education.
7. Explore trade schools
In addition to four-year universities and community colleges, your child should consider trade schools. Students who enjoy working with practical skills such as electrical work, mechanics, plumbing, and home inspections can get valuable training that is highly marketable in this setting.
Not to mention that finishing a trade school program usually takes less time and money than completing a bachelor’s degree program.
8. Work during school – FAFSA: How To Pay For College Without Loan
We’ve arrived at one of my favorite methods for students to pay for a debt-free education: working while in school. What’s that? Why would I want your child to work during his or her college years? This is why.
I’ve learned from personal experience—and from talking to many friends and students who agree—that doing some work outside of the classroom or library actually improves academic performance. I know it goes against what many people in our culture believe, but research shows that students who work part-time (less than 20 hours per week) often have higher grades than those who are not employed. FAFSA: How To Pay For College Without Loan!
You do not have to stop working because you have a full course load. Many students work a few hours per week or more while taking 18 or more credit hours. All you have to do is be wise about how you spend your time. Working while in school allows you to avoid student loans by paying for your living expenses in cash as you go.
If you live at home and don’t have many expenses, you can save the money for future semesters. If you are unable to work during the school year, you may be able to work during school breaks. Among the job opportunities are:
Work and Study Programs
These enable your child to work part-time while still attending school. Your FAFSA letter will tell them if they are eligible. Work-study jobs are typically (but not always) on campus, making them an easy way to combine work and schoolwork. Just make sure they understand that the money is supposed to go toward school expenses, not pizza or beer! FAFSA: How To Pay For College Without Loan.
Side Business
If your child has a valuable skill, hobby, or artistic talent that can be turned into a marketable product, the possibilities are endless. Consider arts and crafts, clothing design, music lessons, and tutoring.
Off-Campus Jobs
Many jobs are ideal for busy college students looking to supplement their income. Customer service jobs that are compatible with a part-time schedule may be the best option for your child. You can make a lot of money from waiting tables, parking cars, or working at the mall. Consider looking for a part-time office job that is more aligned with their career goals.
9. Live off-Campus – FAFSA: How To Pay For College Without Loan
One of the most expensive aspects of college for many students is the cost of room and board. But there is a simple way to avoid this and save a lot of money: live off campus. Whether they commute to class from their own apartment or continue to live with you, your child can save a lot of money.
And I understand that neither of you is thrilled with those possibilities. After all, you’re both looking forward to greater independence. But there is another angle to consider. If you can see your college years as a temporary season of necessary sacrifice for the ultimate victory of debt-free living, you’ll be able to get through anything—even a few extra years under the same roof.
10. Get a Job First – FAFSA: How To Pay For College Without Loan
Still not sure what you want to do? Or you don’t have any college savings. Consider working for a year or two before starting school. Employers are increasingly contributing to the cost of tuition for their employees, even if they only work part-time. Walmart, Taco Bell, Starbucks, Amazon, and Disney are among the companies that pay for college. Some only pay for coursework in specific areas, whereas others are completely open.
If you do your homework, you might be able to save money while also having your basic general education coursework or transferable associate’s degree paid for by your employer. You can also spend time researching different career paths so that when you start full-time school, you have a clear direction.
11. Fill Out the FAFSA
Fill out the FAFSA every year, even if you don’t want to take out federal loans for your education. You may be eligible for free money, such as a Pell Grant. Alternatively, you may run out of money by your final year of school, forcing you to take out student loans. In this case, you can take out the fewest loans possible, but at least you’ll have the option.
12. Start Living on a Budget – FAFSA: How To Pay For College Without Loan
The bottom line for paying for college without student loans is to make wise financial decisions. And it all starts with making and sticking to a budget. Even if you’re living on Ramen noodles and earning minimum wage, a budget will help you make the most of every dollar. Free budgeting tools can help you track your spending and even keep track of your 529 account balance.
Finally, it is possible to pay for college without taking out loans.
Nevertheless, if you still need to get some financing after using several of these 13 ways to pay for college without loans, look into federal student loan options first. However, if you do not qualify or have exhausted those options, consider Ascent. For undergraduate and graduate degrees, Ascent offers three types of loans (both cosigned and uncosigned).
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