#4 – Have Zero College Debt (or, as Close as Possible) – Part II

In the last post I compared entering the workforce after college with many thousands of dollars in student loans to running the beginning of a marathon with a boat anchor tied to your waist.   The comparison is a bit exaggerated for effect, but not too far off.

There probably isn’t any scenario in which it makes sense to run a race with a boat anchor tied to your waist, but there could be reasons to take on some amount of student loans to attend college.  I’ll give you a couple of examples of when it might make sense:

• You have the opportunity to attend a highly regarded but high-cost school (think Ivy League, Stanford, Caltech, etc) where you will not only learn a great deal but also make strong professional connections which will almost certainly possibly maybe provide significant advantages to you over the course of your Money Marathon
• You’ve chosen an area of study for a career (that inspires you!) such that borrowing the money to get your degree(s) is/are a reasonable investment because the pay in the field is significantly higher than most others (think neurosurgeon).

There could be other reasons as well, but frankly with a proper strategy and execution, you can earn a college degree without taking on enormous debt in almost any scenario, and doing so is a significant advantage in your long-term effort to build a healthy relationship with money.

Tips for a Zero Debt College Education Strategy

There is a lot to learn about the details of paying for college. The first step in building a strategy to pay for something expensive is, of course, to clearly understand what it costs,  but we’ll save this topic for another post all its own.

For now, we’ll just highlight some actions you can take to lower your overall costs for college, thereby giving yourself an improved chance of getting your degree without student loans to repay:

High School Years (9th – 11th Grade)

• Be The Teacher’s Pet – No, I don’t mean you should kiss up to your teachers and bring them an apple each morning (what teacher ever wanted an apple from a student anyway?).  I mean be a good student.  Work diligently to achieve the best grades you can.  Do the extra credit work.  Pay attention and participate in class.  It’s amazing what an impact all this has on your final grades, and guess what?  Grades don’t only have a great deal to do with getting into desirable colleges.  They also have a major impact on the $ amount in grants and/or scholarships a school will offer you to attend.  That’s right…..almost all private and even public colleges actually reduce the price they charge for tuition in order to attract good students.  So while its not the end of the world if you end up with a C in a subject that isn’t in your wheelhouse, put in the work and strive for A’s wherever possible.  Colleges will “pay” you for your effort.

• “Gimme the Hard Stuff” – In the same vein as getting good grades, taking Honors or AP classes in subjects you show an aptitude for looks great on your transcripts as you apply to colleges and can boost the amount of “free aid” (grants / scholarships) a school offers you.  AP classes also have the added benefit of actually earning college credit when you also pass the AP exam at the end of the school year.  But…..have a strategy for taking advanced classes.  Take advanced classes in subjects that you are interested in or show an aptitude for.  Preferably both.  Don’t take an AP class in 3D art & design if you have no interest in it and plan to pursue a career in physics.  Your time and effort can be better spent on other pursuits.

• Be the “Dos Equis” Dude –  Making reference to a beer commercial character in a post intended to be read by high schoolers is probably some kind of parent blogging faux pas, but you know who I’m referring to, right?  The “Most Interesting Man in the World.”  You see those commercials and you want to hang out with that dude, or be like him.  Everyone likes interesting people.   Not coincidentally, college admissions officers, who are also people despite the bad rap they often get, also like interesting people.   Carve out time in your schedule to identify, and put in the effort towards, a pursuit of something you really enjoy that will make you interesting.  Sure, if you have a particular athletic aptitude, it might be focusing on training to be a strong candidate to help your eventual school’s athletic team, but don’t limit your thinking about pursuing something interesting to sports.  It can be anything!  Starting a business, a blog, or club, or taking on an internship in something that you are really interested in.  The point is to make the time to find something that you can call your own so that when you write that college entrance essay,  you aren’t part of the herd who relay how they deserve to be at the school because they spent 4 hours a week volunteering at the information desk at their local hospital.  No offense to those kids, and good on them for doing it, but its not that interesting.  Follow your heart, focus on being really good at something you find interesting and it will help to make you interesting too.

• Run the Gauntlet….maybe 2 or 3 Times – I’ll begin this section with the commentary that I think standardized tests like the SAT and ACT are imperfect devices for measurement of one’s intelligence, but the fact is that few colleges in the US do not require results for at least one of them (those that don’t are highly  focused on your grades and how interesting you are, btw).   That said, unless you know you’ll be attending one of those schools that don’t require them, taking these standardized tests are a necessary part of getting into the college of your choice.  So, plan for them.  Take the PSAT in 9th and/or 10th grade as prep, and then plan to take the SAT and/or ACT at least once in 11th grade, and then again in the summer between 11th /12th grade.  In a pinch, you can do it early in your 12th grade year again.  Study for them.  At a minimum, take the free online pre-tests the testing boards offer.  Khan Academy has a good, free prep plan. If you can, get added help in the form of a test preparation guide and/or take a test preparation class.   The point is, you kinda sorta have to do it, so put in the effort and plan to take the tests a couple of times to give yourself the best chance for scores that will be helpful to your college application process.

Application Year (12th Grade)

• Stay in Your Lane –  I never want to crush a dream, so if you earn an opportunity to attend a prestigious and really expensive college that you have your heart set on but which will require you to borrow some money, hopefully you will have done everything else possible to minimize the long-term financial impact of attending that school.  However, its best to have a good understanding of what your budget is going in (you’ll have to discuss with Mom n’ Dad) and focusing your application effort on colleges that fit into that budget.  There are literally thousands of colleges/universities in the US, and almost assuredly you can find a few that will fit your budget, provide a quality education and also give you the campus-life experience you want.

• Use Coupons – When Mom n Dad go to the grocery store, they use coupons wherever possible to reduce the cost of items that we were going to purchase anyway (sidebar:  don’t ever buy something you wouldn’t normally just because you get a coupon for it!).  Junior colleges (also called community colleges) are like coupons for your general education classes in college. GE classes make up the bulk of your classes in the first 2 years and you have to take them anyway, but doing so at junior college will almost certainly ensure that the costs for taking these classes will be significantly lower than taking them at a 4-year college or university.  As much as 80% less!  This can be an especially effective strategy if you aren’t quite sure what you plan to major in as you graduate from high school.  Not only does it lower your overall costs for college, but also allows you to take a couple of years of classes to better define your major area of study for your degree before you commit to spending big money.

• Ask Uncle Sam for Help – Each year the US Dept of Education awards over $120 billion in student grants, loans and work-study funding to college students.  The Free Application for Federal Student Aid (FAFSA) is the form that you fill out each year to determine what level of funding you are eligible to receive.  You’ll submit your 1st FAFSA early in your 1st semester (immediately after October 1st) of your senior year in high school, and you’ll have to repeat the application process annually.  Although its unlikely that You will qualify for significant grants (free money) as the children of dear ol’ Mom n Dad, you may get a work-study option and/or the offer of loans from the government.  Yes, the goal is to not take any loans at all, but if at some point you choose to take them, having the option of the low-interest and flexible term federal loans is where you’d want to go first to get them.

• Ask Everyone for Help– Scholarships are free money, ranging from under $100 to many thousands of dollars, and there are literally tens of thousands scholarships awarded on annual basis from all kinds of sources.  If you can imagine it, there is a decent chance there is someone or some group somewhere offering free money for your education.  Some are “merit-based” (achieving a specific academic standard), others are “need-based,” meaning you require financial assistance.  Others are available to specific ethnicities, areas of study, hobbies or areas of interest.  Unfortunately, most of them require you to apply for them individually, so they aren’t always easy to find.  To begin your search, speak with your HS counselor, and start your search in earnest in the summer between 11th and 12 grade, but you can even start earlier.  You can also check the FAFSA page for options.  A general search of the internet will also give even more choices, but be careful!  There are also scams on the Web.  No legitimate scholarship offeror will ever require you to pay to apply for their scholarship.

College Years

• Git ‘er Done  – This one is pretty simple.  While college should be fun and great time in your life, some students unfortunately decide to turn it into a multi-year party.  Yes, have some fun, but resist the temptation to goof off completely.  Your goal should be to do everything possible to complete your degree in 4 years, and this means committing to taking a full class load (4 -5 classes / semester).  Simple math.  5 years of college cost you about 25% more than 4 years do. If you are also fortunate enough to have earned a merit-based scholarship in college, you’ll certainly have to maintain a high GPA to keep the scholarship year-to-year. Nobody wants to be faced with a sudden 50% increase in their annual college tuition because they lost their scholarship goofing off the previous year. So, git ‘er done.

• Home Cooking –  I know, part of the fun of college is getting to live on campus, but the average cost of living on campus at US schools is about $10,000 per year.  In high cost-of-living locations (unfortunately, this means most of California) it can range up to even $15,000 per year.  These costs add up significantly over 4 years.  As much as it seems awful (ugh, 4 more years w/ Mom n’ Dad), living at home and commuting to school close to home can be a solid option for saving major bucks on your overall college costs.  If that isn’t in the cards for whatever reason, just remember to consider the room and board costs of the school you choose away from home because they vary widely.   Then, when you can (usually after freshman year), determine if living off campus and finding a roommate or two will help lower your costs compared to living on campus.  Maybe, even find a way to buy a property and rent rooms to your friends! Hmm….

• Hit the Salt Mines – In other words….get a job.   This one is a bit less “cut n’ dry,” as there are potential impacts to your eligibility for need-based grants/scholarships, but I’ll assume at least for my kids that you won’t see much in such money anyway.  In addition, if you aspire to be a student athlete, you need to make certain that you follow the rules of the NCAA, NAIA, etc., that govern when and how a student athlete can work (its fairly restricted).  That said, if you are allowed too, and it will help you to pay for some of your costs now vs. taking a loan to do so, you should get a job.  If you can’t work during the semester because of your class load, get a summer job.  Take seasonal work at the Christmas holidays.  Be enterprising, and find a way to make a buck or two to save you two or three over the long haul.

These are just a few tips for lowering your costs for college.  There are certainly others (e.g., rent your textbooks instead of buying them can often save some dough), but the key takeaway is to have the mindset to commit to debt-free college education, and to realize that its possible with the proper strategy.   If you can find a way to be among the roughly 1/3 of college graduates that make it through without any debt, you’ll have run the first few miles of the Money Marathon with a big advantage.  Namely, no “boat anchor” loan tied to your waist.

Next up is a post about a related topic.  Choosing a career path.

Sometimes we know exactly what we want to do with the “working years” of our lives in time to make it the major area of study in college.  Other times, we figure out after we’ve finished college.  Regardless of exactly when it happens, its important to find work in a field that motivates you because it has many positive impacts on your relationship with money…