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How to graduate college debt free

Updated: December 9, 2022
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As you know, college is a substantial investment of your time, energy, and resources. By many accounts, it is well worth the investment to invest in your education; the National Postsecondary Student Aid Study estimates the value-added earnings from a college degree is roughly 15 times the magnitude of the present value of debt.

As college costs and student debt continue to climb, however, students can benefit from any way to minimize the financial burden. From financial aid to saving money to picking up a side hustle, check out this guide for tips on how to graduate college debt free!

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Steps to Help You Minimize College Debt

Students earning an associate's degree earn a staggering $360,000 more on average than those with a high school diploma only according to a recent study by The White House. The median full-time, full-year worker with a bachelor's degree over 25 years of age earned 70% more than a worker with a high school diploma.

Demographic data from the Bureau of Labor Statistics reveals a very high correlation between education and employment stability. As you can see on the chart below, the more education you have is not only correlated to a substantive increase in income but also a reduction in the unemployment rate.

A chart from the U.S. Bureau of Labor Statistics showing earnings and unemployment rates by educational attainment. Earnings are shown by blue bars and unemployment by green bars.

Further, research performed by Georgetown University reveals that nearly 99% of all new jobs created in the US since 2010 went to individuals with a college degree. Despite the obvious benefits of higher education, the cost and potentially debilitating debt can be a huge deterrence for many prospective students.

There are many ways to make your college experience more cost-effective, thus making your investment in your education even more attractive.

So, if you're a graduate student, check out these graduate student scholarships to reduce the financial burden of higher education.

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Finding the Right College for You

The single biggest driver of your college budget will likely be tuition. Knowing this will be such an impactful decision, make sure to do your research. Instead of relying on a magazine or recommendation from a friend, shop around. In order to find the best program for you, start by developing a list of priorities and matching up your list with a short list of prospective colleges.

Online portals like have databases of hundreds of colleges and universities in the US with information about the school, programs, degrees, virtual tours, and contact information to quickly assemble information about a variety of schools. For an in-depth look at finding the right college or university for you, check out our guide on the college admission process.

Leverage College Scholarships

Federal loans and student aid often do not provide enough financial assistance to students, so external scholarships can be quite helpful. Scholarship money can be an extremely helpful resource for many students because the award does not need to be repaid. A school's cost can also be influenced by its status as a public or private college; private colleges tend to have higher costs, so financial aid can be essential for students at these institutions.

With over tens of thousands of scholarships available to students, it may take a bit of research to find the best scholarships for you. Some scholarships are state-based, regionally restricted, based on your ethnicity, academically focused, based on your athleticism, and school-based. Do your research and determine which scholarships are best for you given your college program(s) of interest.

On, you can search scholarships by category to find the ones that best suit you and your needs!

Find State & School-Based Grants

Grants are an immensely beneficial means for students to help reduce the overall cost of a college education. A grant, unlike a loan, does not need to be repaid. A college grant is essentially a type of financial aid that is offered by federal agencies, state agencies, corporations, and/or non-profit organizations.

Did you know Pell Grants reduce the cost of tuition by $3,700 for over 8 million students per year? According to a recent broad-based study on higher education by The White House, Pell Grants are the primary form of financial aid for many college students. Funding for Pell Grants increased by $12 billion dollars which equates to a 67% increase from 2008 to 2014 with the maximum award increasing by $1,000.

Be sure to ask your counselor or the school's financial aid department(s) about all your grant options along with the Pell for Accelerated Completion program and the On-Track Pell Bonus to see if you qualify.

Complete the FAFSA Early

Do you know what FAFSA stands for? A prospective college student should know it stands for the Free Application for Federal Student Aid. The FAFSA form has recently been streamlined and can result in a substantial amount of student financial aid to help you pay for college. If you are unclear on how to complete the form or have questions, please make sure to reach out to the FAFSA team or your tax professional.

The FAFSA application process is used by millions of students and can be a vital tool in preparing for college. While obtaining a low-cost federal student loan is not the first option to reduce the cost of college, it can be a viable means to bridge the gap between your resources and those at your disposal.

Related: Can Graduate Students Get Pell Grants?

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Leverage the America Opportunity Tax Credit (AOTC)

The America Opportunity Tax Credit (AOTC) is a tax credit that was created at the federal government level for low-income and middle-income families to help mitigate the cost of higher education. The AOTC provides for a maximum tax credit of up to $10,000 over four years time for qualifying families and has been expanded five-fold in the past 4 years.

Take College Level Examination Program (CLEP) Tests

A CLEP test is also known as a College Level Examination Program which is designed to assess a student's knowledge in a given subject area. If your life experience or work experience has prepared you with a base level of knowledge in a specific area of study, you can register for a campus-based CLEP exam. The exams are available in a wide range of subjects ranging from business to math to history and English, to name a few. If you pass the exam, you can effectively bypass the respective class(es) saving you the time and the cost associated with taking the course.

Test Out of a Class and Challenge Exams

Like a CLEP exam, some colleges allow students to test out of an entire course based on the successful completion of an exam or assessment. If you are a subject matter expert in a specific area of study, make sure to ask the college or university if you are able to test out of a class or set of classes.

Similarly, a challenge exam may be another route to sufficiently demonstrate to the school an acceptable proficiency in an area of study to help you receive credit for a class that would otherwise be redundant for you. Each school has differing rules, procedures, and fees associated with a challenge exam so ask what options exist for you during the registration process.

National Exams for College Credit

The American Council on Education provides a national platform for students to earn college credits for successfully completing specific classes. Their CREDIT portal was designed to connect workplace learning to colleges and universities in an effort to standardize specific knowledge and work experience with college courses.

Utilize the DANTES Program

For current or former members of the US Military, the Defense Activity for Non-Traditional Education Support (DANTES) may be an option for you. The program was created to help students earn college credits by demonstrating competence within a specific subject matter. If your college or university allows DANTES or DSST credits, you can register to take an exam to earn course credits in lieu of taking the course.

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Obtain Alumni Referrals

As simple as it sounds, if you refer a friend or co-worker to a college or university who, in turn, is granted admission and successfully registers with the college, you may be eligible for a reduction in your tuition. While the typical reduction may only be $50-$100, every little bit helps!

Save on Your College Textbooks

You may be able to save a significant amount of money towards your college by understanding the cost of textbooks and finding taking measures to save on them. Though not terribly common, some colleges and universities include the cost of textbooks with the tuition, which can result in large savings over 2-4 years time. Renting books instead of buying them can be a huge help.

You may also be able to rent or buy ebooks instead of physical textbooks on websites like Chegg, Amazon, and VitalSource to save money. See if any of your classmates have found a cheaper source for textbooks, or if any former students are getting rid of an old textbook you could use!

Income Tax Savings

While there are a number of college savings plans available today, the two most popular are the 529 Plan and Coverdale ESA. The 529 Savings Plan allows your contributions to grow tax-free so long as the account is used for expenses directly associated with college. Most states in the U.S. offer two types of 529 Savings Plans: prepaid and college savings plans. On the other hand, a Coverdale Education Savings Account is a trust or custodial account that can be used for both pre-college and college expenses.

Making Money While in College

Another popular way to minimize college debt is to earn money while going to school. A growing percentage of college students attend school part-time while working full-time. For those without a full-time job, there are a number of options to choose from to earn money while in school. A few options to consider include:

  • Freelancing
  • Paid Internships
  • Tutor
  • Rent or sublet your house/apartment (as applicable)
  • Baby-sit or house-sit
  • Write for a publication or blog
  • Use eBay or similar websites to sell items you no longer need
  • Work-study jobs

The balance will be to have work fit with school in terms of flexibility, hours, resources, and company culture. Finding the right fit may take some creativity and industriousness, but having the work fit your schedule is of great importance.

Reducing Your Monthly Expenses

The final piece of the puzzle to reduce debt is to minimize your monthly expenses. A few quick ideas can end up saving you thousands of dollars per year.

Food. You can reduce food expenses by limiting the number of times you eat out at restaurants and electing to cook at home. Preparing several meals at once will allow you to buy in bulk and freeze meals to be consumed later. Utilize coupons when you are able as they really can add up quickly. Lastly, if you have a meal plan on campus, utilize all the meals on your plan.

Transportation. Leaving your car at home can translate to big yearly savings. If you are able to avert car payments, automobile insurance, parking fees, gas, and maintenance you will be surprised how much you can save.

Housing. Working diligently to reduce housing expenses can also make a large impact on your monthly expenditures. Electing to live in a modest dorm instead of the brand new dorm can be an option. Perhaps renting a home further from campus on a bus line will make sense to consider. Many college students we work with have multiple roommates to help defer the overall cost of housing. Minimizing utilities is another easy option to consider as you remain vigilant about heating and cooling your home. The final consideration is a growing trend for many college students: living at home while attending school.

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By taking full advantage of financial aid, income opportunities, and expenditure reduction, you may be on your way to graduating college debt free.

For additional resources, create a account and check out our blog for the latest in college information.

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