Can You Pay For College Without Student Loans?

Financial Aid




Here’s the $100,000 or quarter million dollar question depending if you’re considering private or public colleges – Can you pay for college without student loans? And the simple answer is yes. But we’re pretty sure you don’t believe the answer is that simple, otherwise why are there so many horror stories about people paying student loans into their retirement?


Don’t Want Loans? Attend A College You Can Afford

The answer maybe yes, but it also may not be that simple. First there’s the fact that there isn’t ONE set price for college. The cost to attend a four-year college can range from a low of $12,000 to over $70,000 per year. So obviously, college choice will have a dramatic effect on how much you’ll pay for college.

The second reason is that even with the assumption of no savings, family income is not set. It can be a lot easier for some families to come up with an extra $10,000 or $20,000 a year to pay for college than, well let’s be realistic here, most other families. So yes, someone from a family with an income of $150,000 or more a year is much likely to be able to pay for college without student loans than someone with a yearly family income of only $70,000.


Ultimately, the way to pay for college without student loans is to make sure you attend a college you can afford. The problem for too many people is that they have other colleges they would prefer to attend then the ones they can afford.

Then somewhere along the college admissions process, the preference of where a student attends becomes the more important criteria for choosing a school and loans become a necessity.

The reality is that if you can’t afford a private school even with need and merit-based aid, then you should attend your state public institution.

If you can’t afford to attend state public 4 year institution, then you need to start at a lower cost community college.

Do not fool yourself into believing that the brand name on the diploma will justify the cost. Unless the college is willing to guarantee you a job at a set salary after graduation, you can’t count on the college’s name to pay off your loans.

The key to avoiding loans for college, no matter what income level, is find colleges that will charge you the least amount to attend.


Why Net Price Is Important

This means you need to start looking at average net price by income category. Or better yet, just use the college’s net price calculator (or use the College Board’s Big Future net price calculator). The estimate you get will be based on your actual income information you enter.

Just make sure you read the results carefully. Colleges have to list your estimated net price after gift aid. But many also provide other numbers such as estimated net cost after financial aid. Too often, this is just a way for the college to list student and PLUS loans so that the net cost will be equal to zero. Some may refer to loans and work-study as “self-help” aid.

In any case, if you don’t want to take out any students loans, you need to be prepared to pay the estimated net cost to attend the college. If you can’t, then you need to start using Net Price Calculators at other schools to find one you can afford.


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