College Without The Debt? 5 Ways To Help Make It Happen

It's natural for a parent to want their child to go to college without ending up with a bunch of debt. But that is generally harder said than done. The good news is that there are some strategies you can use to help prevent student loan debt. Here are 5 proven methods for any budget. 

Use Savings Vehicles. The more you can save ahead of college entrance, the less you or your child will need to borrow. One of the best ways to save specifically for college is by contributing to a 529 college savings plan early and often. These programs offered by states provide a way for you to put money aside and let it grow tax free. Not only does every dollar saved mean one dollar less to worry about, some studies have even found that kids with college funds are up to seven times more likely to attend college. 

Transfer. Check out the area near your intended college (or colleges) for local community colleges. Community colleges often have transfer agreements with universities in their states or regions to allow the maximum number of credits to be transferred and accepted toward a degree. Since community colleges generally are significantly less expensive than universities, doing as much as possible there can save a lot. Be sure to work with both the university and community college to ensure that credits and experience will transfer between schools. 

Plan How to Spend. Making a budget and a timeline for spending your savings, college fund and financial aid can help you make good choices about how to spend the money. For example, it may be wisest to spend your saved money for the first years of school, then begin using student loans so as to avoid unnecessary interest debt. Or, you may be able to balance the amount of financial aid available over the 4 years to avoid having to resort to pricier private student loans. Knowing deadlines and true costs of things like books and housing, you may also be able to plan for installment payments to the school to maximize your ability to cash-flow some of the cost. 

Accelerate Graduation. You may be able to speed up the process of finishing school to help avoid costs for additional years. Check with your child's high school to determine if he or she can take Advanced Placement exams or even lower-level college classes while still in high school -- perhaps even for free. In addition, some universities offer nontraditional programs that can be completed in less than 4 years. You may also be able to take classes both at the community college and the accompanying university to complete your degree early. 

Prepay Loans. Even though you're not required to repay most student loans while the student is still in school, it can be a good idea to do so. Windfalls like raises, bonuses, Christmas gifts or tax refunds (especially refunds stemming from education tax credits) can be put toward the principal of the loan. This can avoid a lot of interest expense and leave your child with less of a burden when they have to start paying after graduation. 

By looking at some alternative ways to attend college as well as strategies to make the most of your saved and borrowed money, you can find a way to minimize the financial pain of college while still enjoying all the benefits.