As the cost of college soars, it seems like a given that a diploma will come with a huge debt, except for those lucky enough to have rich parents or exceptional talent in academics or athletics. In 2015, 7 in 10 college graduates finished school in debt. Twenty years ago, just 5 out of 10 graduates were in the red. "Grants have not kept pace with costs and family income has been flat, so most students will need college aid," says Mark Kantrowitz, a financial aid expert and former senior vice president and publisher of Edvisors.com.
The good news is with prudent planning, it's still possible to keep your debt burden to manageable levels. You might even be able to collect that diploma with no debt at all. The question should be how to graduate with as little debt as possible.
Explore grants and scholarships
The first step to minimize your student loan debt is to explore all other options to help pay for school before you borrow money. Grants and scholarships are a popular, and highly coveted, way to pay for college. Unlike with student loans, you have no obligation to repay any grant or scholarship you receive.
One well-known and generous subsidy comes in the form of the federal Pell grant. This need-based award is worth up to $5,815 for the 2016-2017 school year. Students from families with adjusted gross incomes of less than $50,000 are the main recipients of Pell Grants.
Grant money is also targeted to students with specific career plans or family circumstances. For instance, the federal government has grants for prospective teachers who agree to spend at least four years working in low-income schools, as well as to children of soldiers killed in Iraq or Afghanistan.
Get familiar with FAFSA and CareerOneStop
The Free Application for Federal Student Aid (FAFSA) is the starting point for just about every request for grants and loans, so getting familiar with the FAFSA is essential. Part of the U.S. Department of Education, Federal Student Aid manages the programs that annually provide more than 13 million students with grants, loans and work-study funds.
In addition to grants from the federal government and the states, billions of dollars of private scholarships are awarded each year, according to the National Postsecondary Student Aid Society. In the 2011-2012 school year, 1.8 million students won $6.2 billion in scholarships.
Do the math, and you'll see that's an average of a bit more than $3,400 per student far from a full ride, but helpful nonetheless. Private scholarships support a wide variety of causes, so you can probably find a scholarship targeting your situation.
The U.S. Department of Labor's CareerOneStop provides a convenient search tool to identify private scholarships from more than 7,000 available scholarships. You can specify the parameters to suit your conditions, such as award type, residency, level of study and affiliations.
Winning a scholarship depends as much on luck as on skill, says Kantrowitz. He advises that you apply for as many as possible to increase your chances of winning. You can also boost your odds by seeking out smaller scholarships and essay contests.
One caveat, though: Ask if your school might reduce your financial aid package by the amount of any outside scholarships you win. "If you hunt down an obscure scholarship for red-haired flutists, it will often not really do you any monetary good," writes Kalman Chany, Campus Consultant's founder and president, in the book "Paying for College Without Going Broke."
Apply for special benefits for veterans
Veterans of the U.S. military are uniquely eligible for generous benefits from Uncle Sam. If you served on active duty after the Sept. 11 terror attacks and were honorably discharged, you may qualify for the Post-9/11 GI Bill. This benefit provides up to $21,970 for annual tuition, plus money for housing and books.
If your tour ended before 9/11, you might qualify for the Montgomery GI Bill, which gives veterans as much as $50,000 for tuition over several years. These are just two of the many grants and education assistance programs available to veterans.
Crowdfunding's rising popularity and mainstream acceptance are giving cash-strapped students a new way to raise money for their tuition and educational costs. Typically conducted online, crowdfunding allows students to seek out small cash donations from many individual contributors.
With many individual donations put together, students can amass large enough sums to pay for school costs, thus avoiding or minimizing student loan balances. With an effective online pitch, you can persuade friends, family members and even strangers to contribute to your cause in this case, your education.
Numerous donation-based crowdfunding websites are available. A theater student at Sarah Lawrence College brought in $8,000 on Indiegogo.com. An engineering student at Cornell University raked in $14,000 on GoFundMe.com. Watch out, though: Crowdfunding sites take cuts of up to 9 percent, and payment processing can add another 3 percent. Additionally, some popular crowdfunding sites, such as Kickstarter, prohibit student-funding campaigns.
Work during college
A steady paycheck can definitely help with tuition costs. You may be able to find a federal work-study job organized by your school's financial aid office. Awarded based on need, these part-time positions include both on-campus and off-campus jobs. Waiting tables, lifeguarding and working retail are time-tested ways for students to pay for college.
However, wages for these low-skill jobs haven't kept pace with college tuition increases, so part-time pay doesn't go as far as it once did. "It's not possible these days to work your way through college," Kantrowitz says. "Students who work full time while they're in college are half as likely to graduate."
If you do have a job, check with your employer to see if it offers a tuition reimbursement program. A tuition reimbursement program presents a cost-effective way to further your education while working.
Attend an affordable school
Of course, attending an affordable school will go a long way toward reducing debt. Kantowitz points out that most people who graduate debt-free attend a public college in their home state. Community colleges and city colleges also offer very affordable, high-quality courses, and you can later transfer to a state college if you want.
Online colleges also create new levels of flexibility, particularly for nontraditional students who juggle courses, work obligations and family responsibilities. Because online courses typically eliminate the need to show up in person for lectures, students can slash commuting costs to nothing and tailor their workload to their selected areas of study. Be aware that some programs, such as teaching and nursing, are also good candidates for student loan forgiveness programs.
This U.S. Department of Education site ranks colleges and universities by tuition costs and net prices in its effort to promote transparency. It reports on the highest and lowest full-time student charges for each institutional category such as private for-profit institutions and public four-year institutions. You can also use the site to compare costs for specific career or vocational programs and the institutions that offer them.
A debt-free diploma may not be a reality for everyone, but anyone can take steps to make college more affordable. After all, college grads have better things to do than worry about debt.
5 Ways to Graduate from College Debt-Free. http://www.newsmax.com/FastFeatures/graduate-college-debt-free/2017/03/16/id/755182/
Reaume, Amanda. Graduating Debt-Free with $40,000 in Savings. Huffington Post. http://www.huffingtonpost.com/amanda-reaume/i-graduated-debtfree-with_b_5865980.html
Federal Student Aid Office. https://studentaid.ed.gov/sa/types/grants-scholarships/pell#how-much-money
Post 9/11 GI Bill. http://benefits.va.gov/gibill/post911_gibill.asp