Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, orM ooching off My Parents|Paperback (2024)

FAQs

Is it better to pay for college without loans? ›

Grants, not student loans, are arguably the best way to pay for college education expenses. Unlike loans, grants don't need to be paid back and are therefore an excellent source of funding for college. It's almost like free money!

"Don't worry, this isn't selfish—it's smart!" Ramsey urges parents not to save for college until they have all of their debt paid off except for their mortgage loan, and until they have an emergency fund with enough in it to cover three to six months of living expenses.

Paying for college is hard but doable without taking out any student loan debt. You'll likely need to work hard and be creative if you don't have someone gifting you the money. You can do this by earning scholarships or applying for as many grants as you qualify for.

You'd be surprised how many students are able to graduate, every year, with zero debt. This may sound crazy and impossible, but it's not! There are many ways you can cut back on the cost of attending college. Unfortunately, many people may not know about these tricks.

Some options to help with paying for college include applying for scholarships and grants, looking into work-study options, cutting costs and applying for loans. You can still look into saving for future education with 529 plans, which allow contributions through investments.

So, should parents pay for college? The answer isn't necessarily “yes” or “no” –– it could be somewhere in the middle. You may not feel like you should be expected to cover all the expenses associated with your kid's college, but the hard truth is that college tuition costs much more today than it used to.

Paying for a kid's college isn't a moral obligation, Ramsey wrote, but teaching your kids to always be learning (whether they go to college or not) is a parental duty.

Free or Cheap: The Early Days of the American University

Many early American universities were philanthropically or governmentally funded and thus charged little in the way of tuition. Some fees and the cost of room and board were met by students and their families, but educational costs were nominal in many cases.

"I think the lie we've told people in the marketplace is that a degree gets you a job," Ramsey wrote, according to UpJourney. "A degree doesn't get you a job. What gets you a job is the ability to carry yourself into that room and shake a hand and look someone in the eye and have people skills.

What is a no loans college? ›

Roughly two dozen colleges and universities now have “no-loan” policies, which means they will meet 100% of an undergraduate's need for financial aid with grants rather than student loans, according to The Princeton Review.

Regardless, one rule of thumb for student debt is that you should try not to borrow more than the first year salary you can expect in your chosen field. This means that if you expect to earn $38,000 in the first year of your career, you should try to borrow $38,000 or less for your degree.

This can make it harder to rent an apartment or even get good car insurance rates. Living debt-free can sometimes result in being overly cautious with money. Avoiding all debt means you might miss out on investment or business opportunities that require upfront capital.

More than four in ten students at public four-year universities complete their degree with zero debt. Nearly eight in ten students graduate with less than $30,000 in debt. Among those who do borrow, the average debt at graduation is $27,400 — or $6,850 for each year of a four-year degree at a public university.

The average student loan debt for bachelor's degree recipients was $29,400 for the 2021-22 school year, according to the College Board. Among all borrowers, the average balance is $38,290, according to mid-2023 data from Experian, one of the three national credit bureaus.

Student loans typically have interest that may begin accruing while you're in school. If you can avoid paying interest by using cash from your savings to pay your bills up front, then it will decrease your total costs in the long run.

Graduating from college without the burden of student loan debt has significant benefits. Instead of making loan payments, you're in a much better position to start saving for other goals, such as a new house or planned travel.

Let's say you take out a $100,000 loan with a 6% interest rate to cover tuition plus room and board for a four-year university. With a 10-year repayment plan, you'd be looking at over $33,225 in interest. Yikes! By paying cash, you eliminate interest charges.