The First Step Towards Debt-Free College - Do It Yourself College Rankings

The First Step Towards Debt-Free College

student with backpack of moneyThe following is a guest post by Tom Bottorf of

I’m not sure exactly when the shift occurred, but sometime in the last 20 years, attending college has become synonymous with student loan debt. It’s pretty much assumed that the student should have some “skin in the game” by borrowing money to achieve their noble dream of getting a college degree.

It’s hard to turn on any major news channel without seeing some reference to student loans. And the word “crisis” has entered the discussion. Student loans are now in excess of $1 trillion (that’s a “1” followed by 12 zeros). This is more than the total credit card debt in America.

The average student now owes more than $32K the day they graduate from college. And this doesn’t include the debt mom and dad are in! This might not be quite so alarming if college grads were entering the job market in big numbers and starting out with 6-figure earnings. But this is hardly the case.

Many college graduates can’t afford to support themselves on their starting salaries. So in record numbers they’re heading back home to take up residence with mom and dad, occupying the same bedroom they left some 4 to 6 years earlier. But now they find themselves heavily in debt, over half are unemployed or under-employed… and (understandably) VERY discouraged.

Parents… you need to stop this madness! Students don’t have to take out massive loans to get a great education… to begin their life as an adult enslaved to debt! But this requires much planning. And it requires some good old-fashioned “common sense”, which we know isn’t all that common these days.

The first step in achieving debt-free college is so obvious, I’m almost embarrassed to say it. But since so many parents and students are failing at it, here goes:

STEP 1. You must assess how much you can afford to pay for college!

Obvious… right? Well, apparently not, or we wouldn’t see a trillion dollars of student loan debt!

I tell parents to imagine there were no such things as student loans… or better yet, imagine for the moment that there are no banks at all! This is the way Grandma and Grandpa managed their finances, and looking back it seems to have worked pretty well.

How much in savings do you currently have ear-marked for college? And how much can you commit to saving… on a monthly cash-flow basis? Is there a financial commitment from other family members to help out… with cash? Maybe Grandma or Grandpa?

So What’s Next In Achieving Debt-Free College?

Fortunately, there’s much more to the story than what a family has managed to save. If we were to stop here, very few families would have any hope of achieving debt-free college! Only a small number of families can “write the check” for the total cost of their children’s college costs.

This is where financial aid enters the discussion. The next step involves understanding the complex Financial Aid “system” so that you can forecast how much “free money” you can anticipate receiving from the federal and state governments, as well as private colleges. This will be the subject of my next article, Part 2: “How Financial Aid Works”.

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