Americans are now deeper in college-loan debt than they are in credit card debt. But you probably don't need to borrow money to go to college.
In fact, you shouldn't borrow money, says author and college student Zac Bissonnette.
"The repercussions on your life are actually quite dramatic. You should not sign up for (loans) until you've done everything you can to avoid them," says Bissonnette, 22, who wrote "Debt-Free U: How I Paid For an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents."
He'll graduate debt-free in spring 2011 from the University of Massachusetts, Amherst (art history). Bissonnette paid for it with money he earned during his "workaholic" high-school years. He now blogs for WalletPop.
- Eric Heininger, 25, University of Michigan 2006 (engineering).
- Jennifer Pullen, 23, Texas State University 2009 (public relations).
- Eddie Lukacevic, 17, who will graduate from the University of Kentucky in 2013 (entomology).
These young people are not privileged. They graduated (or will graduate) debt-free because they made it their business to do so.
It wasn't easy, but it was possible -- and satisfying. Says Heininger: "I feel like I own my education."
Cutting it short
Of the three, only Pullen borrowed money -- and only because she qualified for a Texas loan program that would forgive the debt if she graduated within four years. She did it in less than four, thanks to 15 Advanced Placement exam credits, plus summer classes.Heininger finished a semester early due to AP credits and testing out of required language courses. That testing was offered free during his UMich orientation. He figures that shaved several thousand dollars off his tuition.
A home-schooler, Lukacevic is technically a high school senior but has completed most of his high school requirements. He'll get those final credits this fall while attending community college full time. Not every 17-year-old is ready for dual enrollment, but Eddie feels "pretty confident" about it.
He'll also be taking College Level Examination Program tests in biology and psychology, paying $90 per test vs. $500 in tuition. (Find out if your school of choice accepts CLEP credits.)
The takeaway: Early graduation is a big money-saver. Test out of classes if you can. Attend summer session. Investigate dual enrollment in high school and community college. Also: Seek colleges with three-year bachelor's degree programs, such as the University of Washington and the University of North Carolina-Greensboro.
Dream vs. reality
High-school counselors encourage students to apply to "dream" schools as well as to lower-priced (but still excellent) institutions. Here's a wild idea: Apply only to the lower-priced colleges.A "name" school might give you an advantage -- but it might not. A Princeton University study (.pdf file) found that students who are accepted at elite institutions but choose to go elsewhere wind up earning just as much as those who attend the ritzier schools.
As a young teen, Pullen wanted to attend the University of Texas. As an adult, she says less-pricey TSU gave her a great education and "more social networking," which helped her find a job at a Dallas public relations firm.
Keep in mind that the school you graduate from is the school on your diploma. Lukacevic is starting out at a community college, but he plans to get his degree from the University of Kentucky.
Yes, it can be hard to let go of your dream school. Let go anyway. When you're 18 you don't fully comprehend that $75,000 in loans could mean a $1,400-a-month loan payment after graduation. What percentage of your expected salary would that be?
The takeaway: Pick a solid school that's also affordable. Consider two years of community college (but make sure all the credits will transfer).
Continued: Low monthly payments?