How to Pay for College Without Student Loans
Here’s the $100,000 or quarter million dollar question depending on whether you’re considering private or public colleges…
Can you pay for college without student loans?
And despite the fact that there are so many horror stories about people paying student loans into their retirement, believe it or not, your answer SHOULD be “yes.”
Getting through four years of college without having student loans IS possible, however, a concerted effort and strategy must be in play in order to achieve that.
If You Don’t Want Student Loans, Attend a College You Can Afford
One of the first reasons that avoiding student loans is so difficult for so many is the fact that there isn’t ONE set price for college.
The cost to attend a four-year college can range from a low of $12,000 to over $70,000 per year, so obviously, college choice will have a dramatic effect on how much you’ll be expected to pay for that education.
The second reason is that even with the assumption of no savings, family income is not set.
There is a huge disparity in wealth in this country.
It can be a lot easier for some families to come up with an extra $10,000 or $20,000 a year to pay for college than most other families.
So yes, someone from a family with an income of $150,000 or more a year is much more likely to be able to pay for college without student loans than someone with a yearly family income of only $70,000.
Realistically, the way to pay for college without student loans is to make sure you attend a college you can afford.
But far too many people fail to do their research and set their sights on schools they would like to attend before they know how much they cost.
Then somewhere along the college admissions process, the preference of where a student attends becomes the more important criteria for choosing a school and loans become a necessity.
The reality is that if you can’t afford a private school even with need and merit-based aid, then you should attend your state public institution.
If you can’t afford to attend a state public four-year institution, then you need to start at a lower cost community college.
Do not fool yourself into believing that the brand name on the diploma will justify the cost.
Unless the college is willing to guarantee you a job at a set salary after graduation, you can’t count on the college’s name to pay off your loans.
The key to avoiding loans for college, no matter what income level, is find colleges that will be most generous to you with their money.
Why Net Price is Important
The most basic way to check the cost of a college is via its Net Price Calculator.
Every school that participated in the federal financial aid system – which is basically all of them – must post a net price calculator.
So, use the college’s net price calculator (or use the College Board’s Big Future net price calculator).
The estimate you get will be based on your actual income information you enter.
Just make sure you read the results carefully.
Colleges have to list your estimated net price after gift aid.
But many also provide other numbers such as estimated net cost after financial aid.
Too often, this is just a way for the college to list student and PLUS loans so that the net cost will be equal to zero.
Some may refer to loans and work-study as “self-help” aid.
In any case, if you don’t want to take out any students loans, you need to be prepared to pay the estimated net cost to attend the college.
If you can’t, then you need to start using Net Price Calculators at other schools to find one you can afford.
Researching how generous colleges are is a good strategy, however, nothing is guaranteed. Keep that in mind when going over costs.
|Interest Rate||Interest Rate & Other Discounts||Repayment Options (Monthly)||Cosigner Release|
|4.73% – 11.46% (Fixed)|
1.57% – 10.23% (Variable)
|$250 principal balance reduction benefit and 0.25% discount with autopay||Immediate repayment, interest-only, fixed monthly payments in school, fully deferred||Yes||CHECK RATE|
|3.49% - 12.99% (Fixed)|
1.24% - 11.98% (Variable)
|Auto-Pay (0.25%)||Flat Payment (In-School), Full (principal & interest), Deferred, & Interest-only||Yes||CHECK RATE|
|5.45% - 9.74% (Fixed)|
1.7% - 7.68% (Variable)
|Auto-Pay (0.25%)||Immediate repayment, interest-only, fixed monthly payments in school, fully deferred||Yes||CHECK RATE|
|4.74% - 11.85% (Fixed)|
1.50% - 9.66% (Variable)
|0.25 percentage point deduction for auto debit||Pay now or later: Make interest payments, pay a fixed $25 payment, or defer payments until after school.||Yes||CHECK RATE|
|4.40% - 12.19% (Fixed)|
1.47% - 9.80% (Variable)
|Full (principal & interest), Deferred, Interest-only, Immediate-Repayment||Yes||CHECK RATE|
|4.86% - 8.49% (Fixed)|
2.99% - 6.95% (Variable)
|Autopay (0.25%)||Full payments (Principal and Interest)||Yes||CHECK RATE|
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