College is a valuable investment. It’s also a large expense, and many students find themselves facing crushing debt burdens when they graduate. The choice between foregoing education and incurring debt can seem brutal. It may seem like you lose either way. It doesn’t have to be that way. You may not be able to graduate completely debt-free, but you can get a college degree without burying yourself in unmanageable debt.

The advantages of college are clear. College graduates earn, on average, over $30,000 a year more than non-graduates. They are less likely to be unemployed or poor and more likely to have health insurance. They live longer, they are healthier, they have more assets, and they are less likely to divorce.

The costs of college can be daunting. According to a summary of current college costs from, attending a 4-year state college in your state averages $25,864/year, while a private 4-year college weighs in at $53,949[1]. That cost has created a huge student debt problem: 43.2 million Americans owe an average of $39,351 each[2], and many are struggling to pay those debts.

🤔 Since college graduates earn so much more than non-graduates, can’t they just use that income to pay off debt?

That extra income doesn’t appear immediately after graduation. Many graduates take some time to find appropriate jobs and reach their earning potential. In the meantime, interest piles up, and loan balances bloat. This problem is particularly acute for students who graduate during economic downturns like the 2008 recession and its extended “jobless recovery.”

Fortunately, you don’t have to choose between giving up the advantages of college and borrowing more than you can pay. Here’s where to begin.

Start in High School

Many high schools offer Advanced Placement (AP) classes, and many colleges will give you credit for basic courses through AP or College Level Examination Program (CLEP) exams. Some high schools even have dual enrollment programs that allow you to take courses at a local college while still in high school.

All of these programs allow you to earn college credits before you start college. The average American college charges $559 per credit hour[3], so testing out of a 3-credit course saves you $1,677.

💡 AP courses on your record look good on your application as well!

Fill Out the FAFSA

The FAFSA is the Free Application for Federal Student Aid. It covers federal loans, grants, and work-study programs. Private scholarships, universities and colleges, and state aid programs also use the FAFSA and the information it contains to decide eligibility. That makes the FAFSA an essential step if you’re looking for help in financing your education.

☝️ Despite the critical importance of the FAFSA, many students don’t fill one out.

A US Dept. of Education study revealed that 24% of students chose not to submit a FAFSA and 3% didn’t know what a FAFSA is[4]. These are not necessarily students who don’t need aid: 29% of those who did not submit the FAFSA are from the bottom 5th in terms of socioeconomic status and 23% are from the middle three fifths.

The Dept. of Education found a variety of reasons why students did not fill out the FAFSA.

  • 15% were not aware that they could submit a FAFSA.
  • 23% lacked information on how to complete a FAFSA.
  • 28% did not want to take on debt, even though the FAFSA also determines eligibility for many outright grants.
  • 32% thought they would be ineligible.

If you’re concerned with the affordability of education, fill out the FAFSA as early as possible. Remember that 86% of students receive some form of financial aid, and $2 billion in budgeted federal grant money remains unclaimed every year[5]. If you don’t know how to fill out the FAFSA, seek out online resources or request help from your high school’s guidance office.

👉 Remember that the FAFSA is free, and you do not need to pay anyone to submit it or prepare it.

Apply Strategically

You’ll consider many factors when you’re making up a shortlist of schools where you’d like to apply. Once you have a shortlist, though, you’ll break the schools into three categories.

  • Aspirational applications are to schools you’d love to attend but where you think you may not be accepted or you may not be able to afford to attend.
  • Realistic applications are to schools where you have a high probability of acceptance and that are reasonably close to your budget.
  • Safety applications are your fallbacks: schools that will almost certainly accept you and that you’re most likely to be able to afford.

You should apply to at least one and ideally two or three schools in each category. It’s worth having those aspirational applications in there because you might get accepted, and you might be able to organize enough financial aid to avoid debt or keep it minimal. If you can’t, you haven’t lost anything but an application fee. Your safety applications provide a fallback if your main choices don’t work out.

💡 Remember that you can spend 2 years at a more accessible school and apply again as a transfer student!

Include In-State, Affordable, and Community Colleges

If affordability and avoiding debt are important concerns, you should have at least one in-state public college or university on your list. State colleges give the best deals to in-state students (in-state tuition is on average less than half of out-of-state), and many offer more financial aid options to in-state students. If you live near a state college or university, it’s always worth applying there if you’re trying to avoid debt. Living at home can dramatically reduce the cost of college.

📋 Check these lists of the most affordable colleges and the states with the cheapest in-state tuition. If you’re in the right state or near the right college, you could be in luck!

Don’t overlook community colleges. They are inexpensive, often accessible, and usually have flexible study schedules that allow students to work and study at the same time. If your main purpose in attending college is to improve your work prospects, note that there are well-paid jobs that require only an associate degree, which most community colleges offer. If you’re set on a four-year degree, doing two years at a community college and then transferring can slash the total cost of your degree and the amount of debt you may need to take on.

📋 Check out this state-by-state list of community colleges for a school near you.

Look for Every Possible Source of Aid

Many students don’t exploit all available sources of aid. Federal and state grant programs are the obvious sources but don’t stop there. The more you know about the available sources of aid and the overall student aid landscape, the more likely you are to earn a college degree without debt.

Some places to start looking.

  • Your school’s financial aid office is your first point of contact. As soon as your acceptance is confirmed, make contact and see what they have to offer.
  • Your high school’s guidance office may have information on scholarships specifically serving members of your school or community.
  • The US Department of Labor has a financial aid database listing over 8000 scholarship and grant opportunities.
  • The US Government’s website has information on federal programs and many others.
  • The Consumer Financial Protection Bureau has a good guide to understanding your financial aid offer and paying for college.
  • Most state education departments offer scholarships and grants. Check out this database of state scholarship programs.
  • Privately operated websites like,, FastWeb, and Edvisors offer listings of scholarships and useful advice on how to apply.
  • Ask churches and civic organizations in your community if they offer scholarships or they know of anyone who does.
  • If you’re a member of a minority group or traditionally disadvantaged community, look for scholarships that specifically serve people in your group. The NAACP offers scholarships and can help link you to other opportunities, as does the NALEO Education Fund for Americans of Latinx origin. Similar organizations serve other groups.

💡 If you meet the requirements for a scholarship, apply. You may not succeed, but you won’t know if you don’t try.

⚠️ It’s generally not worth applying for scholarships if you don’t clearly meet the application criteria.

Start Early

The earlier you start this process, the better off you’ll be. Many scholarship programs only award grants until their budget for that year is used up. Even if you’re qualified, you may not receive money if other qualified people got there first.

If you submit your FAFSA as early as possible, get your applications in as early as possible, and apply for scholarships and grants as early as possible, you’ll have a better chance of getting aid and more time to assess your options and make good decisions.

Think Before You Decide

Once you know where you’ve been accepted and how much financial aid you can get, it’s time to make decisions. This is when you need to keep your feet on the ground. College is an investment, but like all investments, there’s risk involved, especially if you need to go into debt to get your degree. It may not be possible to graduate entirely debt-free, but you should do all you can to minimize your debt and keep it at a manageable level.

Remember that while the data say college clearly pays off in higher earnings, it may not do so right away.
Going for that high-profile school and relying on the degree to generate enough return to pay the debt is risky. Even with a high-quality degree, you may not walk straight from college into your full earning potential, especially if economic conditions are weak when you graduate. The interest on your loan will be piling up while you’re getting established.

A degree from a higher-profile school can help you get better jobs and earn more, but that’s not guaranteed.
You have to weigh that possibility against the real risk of taking on too much debt. Going for a less expensive school or starting at a less expensive school and transferring are options worth considering.

Finish on Time

We’ve all heard of the eternal students, the ones who enjoy the college experience so much that they never seem to graduate. That might be fun, but it’s also a way to run up a lot of debt, especially if you’re borrowing from private lenders and your loans are accruing interest as you study. Stay focused, stay on schedule, and avoid wandering from major to major. Finishing college on time will keep your costs more manageable.

This is something to consider if you’re considering working while in college. A part-time job can help defray your expenses, but if it means an extra year or more in college because you couldn’t take a full course load every semester, you could lose more than you gain.

☝️ Remember that every extra year you spend in school is not only a year of college expenses but also potentially a year of full-time income that you aren’t earning because you’re still in school.

Know Where You Stand

Before choosing a college and developing a payment plan, you should take stock of your objectives and your options. 

  • Can you study close to home? Living away from home may be part of the college experience you want, but staying at home a little longer can save a lot of money.
  • Can you start your education at a Community College or in-state college? Even if you dream of a high-profile college, starting local can save money. Starting at a Community College, working on the side, and then transferring is a great way to cut education costs.
  • Have you looked at every possible source of scholarships and financial aid? Never assume that you aren’t eligible or that a lead isn’t worth following up. There are no guarantees, but if you don’t look, you won’t find anything.
  • Have you assessed the hidden costs of college and planned around them? Food, textbooks, transportation can add up to a considerable sum, but careful planning can cut your costs.

When you’ve selected the school that offers the best value, cut your costs as much as possible, and mustered all the financial aid you can get, you’ll have to compare your resources to the cost and see how close you are to paying for college without debt. If there’s still a shortfall, you may still need to borrow, but at least you’ll know that you’re taking on the least possible amount of debt. You may not be able to completely eliminate debt, but you should be able to get a degree without burying yourself in debt.

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