The Smart College Roadmap

Part 2. College Without Debt. Yes, You Can!

Welcome to Part 2 of this three-part series of The Smart College Roadmap!

In the last article, The College Decision, we discussed the process for figuring out if college makes sense in the first place. Now that you have decided that college is on the roadmap, let's save as much money as possible along the way!

"An investment in knowledge pays the best interest." -Benjamin Franklin

It's important that we remember why we're going to college. Usually, college builds an avenue to generating income to fund a future desire. That future desire may be a large purchase, helping others or retirement. Just like buying a car, you'd like to walk away knowing you got the best deal possible. Our goal here is to find the best college experience at the most affordable price.

Whether you're going to college full-time or taking a few classes here and there, it is possible to find the right balance of school, work and fun to stay out of debt before you graduate. Student loan debt is taking over the nation and who wants to spend 10-20 years paying off college debt before saving for their own financial freedom?

Let's Do Some Math

Let's say you walked away from college with $100,000 in student loan debt.

If it took you 15 years to pay off the debt at a 7% interest rate, you'd be paying $900 per month with over $160,000 out of your pocket after it's all paid off. It would be worse if your loan started accruing interest while you were still in college, known as an unsubsidized loan.

If instead, you found a way to pay for college without debt and invested that $900 per month after leaving college, you'd have around $275,000 after 15 years at 7% interest!!

That's a $435,000 swing! It would take 30 years to get to that point after college if you had to pay off the debt first. I'm here to try and keep you out of that hole.

You should always speak with your financial aid counselor at the school you choose for scholarships and grant opportunities but we're here to discuss saving for the amount of money you'd still be responsible for after receiving any financial assistance from the government, school, family or work. However, do not take finding assistance lightly and always ask your employer if they can help.

Saving for College

Like any large purchase, you should plan to save for college. It's too easy to swipe credit cards and get approved for loans that teach you to live outside of your means. This habit gets people used to living paycheck to paycheck from an early age. If you can get into this mindset before entering the world of credit cards and loans, you'll be far ahead of most people that get a start from behind with debt.

When you need save for a large purchase, in this case a large tuition payment, you'll take notice of the hard work it took to write that check. Putting the payment into student loans lets us think we can worry about it later and causes many people to pay for more than they can actually afford. There is no guaranteed job at the end of school. The world is constantly evolving and all we know is what we have right now.

There's no better feeling than going into your first year of college knowing that it's paid for. It's the same prideful feeling people get when paying for a vehicle with cash, paying for a vacation up front or paying off their house. You'll respect the road it took to get you there and have the drive to perform well in the classes you worked so hard to pay for.

Let's Do Some Math

The average cost per credit hour is around $600 and a Bachelor's degree requires 120 credit hours. This means a full year of college on average could cost around $18,000 in tuition alone.

If you started working at the age of 15 and had three years before college to start saving, you'd have to save $115 per week to pay for the first year.

That's a lot to save at such a young age! Yes, it is, but if you can't save for it, you can't afford it. The earlier you start, the longer you have to save.

Know What You Can Afford

Start a monthly budget to understand exactly how much money is coming in and going out of your bank account. This will show you how much money you can direct towards saving for college and the areas where you can cut back to increase savings. You'll probably be surprised where your money is going after you start tracking it daily.

There are two ways to increase your savings rate: cut your expenses, or increase your income. Cutting your reoccurring expenses can be done right now. Think about what is essential to pay for now to experience life, while still saving for college in the future. Shop around on the services you already pay for and start taking a frugal approach to your entertainment costs. As Dave Ramsey says, "Act your wage." You're not going to get big annual raises at the same job. If you'd like to maximize your income before college, it's important to always be looking for new job opportunities that will increase your college savings.

You could try to increase your savings through investments, but planned savings for short-term purchases should not take on risk that could decrease in value. You'd hate to work so hard to save for college, and then have a market crash reduce your savings right before tuition is due. The best interest rates on your college savings would come from a safe Certificate of Deposit (CD). Your money is locked away for a period of time, usually anywhere from three months to five years, and there is no negative interest risk that would lose your money. Many banks run CD specials, so it's important to shop around and make sure that the funds will be available in time for your tuition payment.

Once you learn how much money you're able to save from looking at your budget, you can start evaluating your options for college that you can afford. Transportation, housing and meals need to be considered outside of just tuition. Don't limit your options to large universities—community colleges and online schools can save you money and allow you to earn the same degree. Very few professions actually care about the college you graduated from. Most job postings simply require the degree or equivalent experience.

Learn From My Story

The community college I went to charged around $100 per credit hour, whereas the university I later obtained my Bachelor's degree from charged around $300 per credit hour. I was able to complete my associate's degree for $12,000 cheaper than it would have cost if I went to the university for the whole degree! It's much easier to save for the $3,000 you would need to pay for the first year of community college than the $18,000 we talked about in an earlier calculation.

Best of all, when I graduated, the Bachelor's degree from my university is what is listed on my resume for job applications. Transferring from a community college to a university was a great decision. To be honest, I didn't take college as seriously in my freshman and sophomore years as I did when I was a junior and senior. I also didn't notice a difference in the quality of the faculty; all professors seemed to have the same passion for helping students.

Calculate how much you'd need to save to cover the first year of tuition. I recommend focusing on paying for the first year because your roadmap and budget could change after you enter college. Once you start your first year, you can focus on saving for the following year. Summer break is a big income generating opportunity if you don't generate enough income during the school year. If you get in the habit of working each year to pay for the next, you'll eventually get ready to graduate and have a savings built up to help with the next step in your life.

How fast do you need to graduate college? Consider if you can you afford to speed it up or if it wouldn't hurt you to slow college down. In some cases, you may be doing what you already love to do for work, and graduating from college is a personal goal or needed as a prerequisite from something further down your roadmap. There's no need to rush college and fill your schedule with school and work just to get burnt out and not experience life along the way. Think about your roadmap and how quickly you need to complete college to speed up your long-term desires.

Learn From My Story

I went to college part time and it took me nine years to get my Bachelor's degree. I was already working in a career doing what I loved as a computer programmer and I didn't need a college degree for my profession. I already had my foot in the door and was gaining the experience that would trump a college education.

There was no guaranteed promotion or financial increase tied to obtaining a college degree for me. But, I wanted to further educate myself in the business side of technology, so I decided to continue pursuing my degree and take two or three classes per semester. Receiving my degree was a great personal achievement and taught me the additional skills I wanted to learn to become a business owner further down my roadmap. As predicted, nothing has changed financially since obtaining my degree and I see no need to obtain a Master’s degree—unless my roadmap changes and I decide to pursue a teaching career.

But College Is For Partying

No matter what stage of life we're in, we should always be experiencing life to its fullest. However, don't lose sight of why you paid for college in the first place with your hard-earned money. You've already made the commitment to dedicate time for education, along with making time for creating unforgettable experiences. It's all about balance.

Understand the standard of living you can afford within your college budget and don't use debt to be someone you're not. You're in the perfect environment around other penny-pinching college students who are constantly coming up with new and creative ways to have affordable unforgettable experiences. This is your chance to build a frugal baseline and a respect for money that will follow you into the real world.

If they'll let you, I would highly recommend living with your parents throughout college. Housing is a huge expense, and it will be the largest expense in your budget for the rest of your life. Housing can cost more than tuition, so reducing housing expenses as much as possible will open up your budget for more unforgettable experiences. Weigh out the extra costs of commuting to school vs. splitting rent with other students.

Learn From My Story

I know there are some unforgettable experiences when living on campus, but I had many unforgettable experiences myself while still living at home throughout college. I was able to save extra money on housing and groceries, while still attending student events and hanging out with my friends that were living on campus. I may have missed the day-to-day college life, but I was able to get the best of both worlds and had more money in my pocket along the way.

We had a great backyard with a fire pit and pool where my friends could come hang out. I was a few minutes away from the beach I loved, so I could go surfing and come home to a fridge packed full of mom's best food. The utilities were always on and I could continue saving for a down payment on my house, instead of throwing away rent money. I was still close to my home base of friends, but could afford the gas money to drive out to college for weekend adventures. It was a great balance and I'm thankful my parents allowed me to experience it.


Staying out of debt is all about learning what standard of living you can afford through creating a budget to finance your roadmap. Paying for college is no different from paying for other large purchases. Striving to complete college without debt will teach you money skills that most of the nation never learns.

Our credit system is too easy to get hooked into as young adults when we're more worried about experiencing life today than caring about our future freedom. Debt can get you into holes that are hard to climb out of and force you to be in jobs or life situations that you don’t want to be in. Don't bring college debt with you into the real world, leave it behind so you can focus on the next chapter.

Learn the power of savings from a young age and you will have the world at your fingertips.

Thank you for your precious time. I wish you great success!

Part. 1 - The College Decision
Part. 3 - Easing The Post-College Job Hunt

Sean setup his life to retire early. Have you?

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