3 Tips to Graduate College Debt-Free (or Close to It)

Posted July 31, 2014 by
Young male graduate in cap and gown holding piggy bank

Young male graduate in cap and gown holding piggy bank. Photo courtesy of Shutterstock.

The severity of the student loan debt crisis in the U.S. varies depending on whom you ask. The average 2013 college graduate left school with $29,400 in student loan debt, according to the Project On Student Debt. But a 2014 report by the Brookings Institute indicates that student loan debt is no more of a detriment to borrowers today than it was 25 years ago. One key finding from the same study is that the median amount of student loan debt for 20 to 40 year-olds is only $8,500, indicating the average is skewed by extreme outliers.

Either way, the best way to handle student loan debt and the effects thereof is to not accumulate any in the first place. These three tips will help you graduate with little to no debt.

Pay In-State Tuition

The average cost of tuition, fees and housing to attend public in-state universities in the 2013-14 academic year was $18,391, according to the College Board. The average cost to attend an out-of-state school was $31,701, or 58 percent more than staying close to home.

Unless you come from wealth or have a substantial scholarship already in place, it’s only practical to take a year off from college before attending an out-of-state school. Most universities require residency in the state for at least one year before granting in-state tuition.

But that doesn’t mean you can simply rent a post office box and get a driver license in another state to benefit from the discount. Most schools require a plethora of proof, including tax returns filed in the state, local voter registration cards, home rental records and vehicle registrations. And in some cases, all that still does not guarantee in-state tuition. The University of Arkansas, for example, requires students to sever any and all ties with other states to get in-state tuition. Suzanne McCray, the school’s Vice Provost of Enrollment, told U.S. News and World Report that any student under the age of 23 with parents who live outside of the state will very likely pay out-of-state tuition regardless of any other circumstances.

Check admissions requirements on university websites and call the cashier’s office if further verification is necessary.

Exhaust All Possible Scholarships

Students must file the Free Application For Federal Student Aid to be eligible for any federal aid and most state dollars. Late June is the FAFSA deadline in most states, but you can—and should—file on the first day of the year prior to the fall semester you plan to enroll. The sections that ask for tax data can simply be estimated.

Students will know what their expected family contribution (EFC) is once their student aid report (SAR) is generated from the FAFSA. Pell grant awards are based solely on EFC, as are some scholarships and other grants. Some schools will also require students to fill out the CSS/Financial Aid Profile to be eligible for institutional grants and scholarships. Keep in mind, many scholarships and awards are first-come, first-served, so the sooner you file your FAFSA, the better.

Scholarships aren’t necessarily advertised or made known without doing some research. Scholarships.com, Fastweb and Zinch are three sources for scholarship searches; Zinch even awards a weekly $1,000 scholarship to the student who can write the best three-sentence essay.

Think Creatively

Start a crowdfunding campaign on GoFundMe or one of the more popular platforms and see what happens. If you get periodic payments from an annuity (or if one was bequeathed to you), consider selling your future payments to a company like J.G. Wentworth for a lump sum of cash now. You can even participate in clinical trials to help pay for your education. Check with the school’s medical school and psychology department for more information.

The keys to graduating debt-free are minimizing the amount you have to pay to attend college and maximizing potential monetary awards and scholarships. With this information, you’re off to a great start.

Source: SocialMonsters

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