How to Pay for College Without Student Loans

How to Pay for College Without Student Loans

Right now, as you read these very words, the total amount of student loan debt in the U.S. is over $1.6 trillion.1  Staggering, right?

The good news is, you don’t have to be part of that statistic. You can pay for college without school loans. It’s just going to take a little more effort, but in the end, the effort will be worth it. When you walk across the stage with your degree, you’ll be stepping into your dreams instead of into debt.

How can you make this happen? Like this:

Get Smart About College

Get Smart About College

First off, let’s address an all-too-common misconception. Maybe you’ve heard the idea that debt comes in two forms: good and bad. Student loans (an “expert” told you) are part of the “good debt” category—an “investment in your future.” Right? Right?

Wrong. 109% wrong, in fact.

All that student loans do is delay. Of course, they delay you paying for school with your own money. But then, when you’re graduated and ready to start crushing your goals for the future, those student loans step in to delay once more—this time targeting your dreams.

Because when you take out loans to pay for college, you aren’t starting with a clean slate. You’re starting with an average of $35,359 in debt with interest rates ranging from 4.53–7.08%.2,3 And you’re starting with a debt-weight that’s delaying you being completely in charge of your own money for up to 30 years.4 That’s how long it can take to pay those suckers back—up into your 50s, friends.

That’s not “good.” Not good at all.

Ways to Pay for College Without Student Loans

Ways to Pay for College Without Loans

So. Don’t get loans. Problem solved!

Oh, wait. You still need to know how to make this college thing happen without those dream-delaying loans. Guess what—it’s completely possible. Just follow these tips.

1. Start at community college.

Go to community college for two years, and then transfer to a university. Community colleges are cheaper (and perhaps free depending on where you live). And no future employer will toss your resume in the trash when they see you went this money-saving route. (If they did, you wouldn’t want to work for them anyway.)

2. Select an in-state college.

You can save around $16,000 a year in tuition and fees just by staying in-state.5

3. Choose a college based on affordability.

Your local community college will cost around $3,660 a year. That private four-year school is more like $35,830.6 When you’re picking which college to go to, take a good, long look at those numbers.

4. Live at home.

No, we aren’t joking. If you’re able to live at home, as least those first two years, you can save big bucks and make a huge financial difference in college costs.

Listen, 44% of people with school loan debt say it holds them back from buying their own homes, according to a 2019 survey by our Ramsey Solutions Research team. So if staying with your parents while you’re in college keeps you from being part of that percentage—isn’t it worth it?

Don't be part of those 44% of people with school loan debt who say it's holding them back from buying a home of their own.

5. Make smart money choices throughout college.

Buy used textbooks. Carpool, bike or walk. Pick the most affordable meal plan. Don’t purchase front-row tickets to see your favorite bands perform live each month. While you’re in college (and throughout life, really), remember that thrifty isn’t a four-letter word. Debt is.

6. Pay for college with scholarships.

Step one: Fill out your FAFSA every single year. Yes, this is how you get college loans—which you won’t be doing—but it’s also how you get free money, as in scholarships and grants. So get that FAFSA form and start filling it out.

Look into local scholarships.

Sometimes free money is right under your nose. Well, not literally. We’re talking about local scholarships. Ask around. Talk with your guidance counselor, the chamber of commerce, community or church groups, your employer, and your parents’ employers to see about scholarship offerings and how you can apply.

Search for national scholarships.

The internet is full of weird and wonderful scholarship opportunities. Check out,, and for thousands of opportunities. You can also get your hands on The Ultimate Scholarship Book, updated each year, to narrow down scholarships based on major, career goals and more.

Make use of military scholarships.

Did either of your parents serve in the military? Do you plan to serve? If so, be sure to take advantage of the benefits available to active duty service members, veterans and their families. You can find more information at

Ask about school-specific scholarships.

Contact your future college’s admissions office, financial aid office, the department head of your chosen major, as well as the athletic director of your sport to ask how you might earn a scholarship.

Hunt down scholarships like it’s your job.

You can make some serious money if you’ll take scholarship hunting seriously. Treat it like a job and spend time online searching and applying—one hour each school day and a couple hours a day on breaks and weekends.

It really does work! Our friend Anthony ONeal, a bestselling author, speaker, and Ramsey Personality, once mentored a high schooler who earned $88,000 by applying for scholarships for one hour every day for three years. She basically made $80 an hour investing her time like this. Worth. It.

7. Pay for college with grants.

Are you looking for even more free money (aka money you don’t have to pay back—ever)? When you fill out your FAFSA, you’ll hear if you qualify for any grants, which are based on either financial need or financial need and merit (like academic achievement).

Federal and State Aid

The Pell Grant is one of the most popular federal grants. And your state probably offers multiple award opportunities. Eligibility on the state level often connects to your grades, test scores, and extracurricular activities. Don’t delay applying for these. Many states put a cap on the amount of aid they give out each year.7 When it’s gone, it’s gone. 

8. Pay for college with hard work.

Get a job.

Work. Work all summer. Work part-time in the school year. Work to make money so you can pay cash for school.

“Oh, but I have to study. And have fun. That’s what college is all about.”

First of all, no. College is about learning time management, developing problem-solving and communication abilities, and gathering the mastery of skills and knowledge needed to enter your desired career space—and doing those three things without debt. Without having a $393 monthly loan payment for up to 30 years.8

Second of all, research shows that students who work part time (less than 20 hours a week) often have better grades than those who aren’t employed.9 So working while in college does you all kinds of favors.

Look at it this way: You could take out school loans—or retire a millionaire in your 50s.

Here’s the math:

The average student loan payment equals $393 a month, paid out for up to 30 years. That means you could be paying off those loans into your early 50s.

But what would happen if instead of taking out those student loans, you invested the $393 (at 11% annual return rate) into a retirement account for 30 years? You’d have just over $1,000,000 in your early 50s. Yes. Really.

So working part time in college isn’t looking so shabby right now, huh?

You could repay $393 a month for 30 years on student loans or invest that and retire a millionaire.

Save your income.

The next step after making money is to not spend it all. You need to save up those dollar bills to pay your tuition bills. Find a good balance in your college life. They say “all work and no play” makes you dull. But on the flip side, “all play and no work” makes you broke. Live that “work hard, study hard, save up, and play thrifty” mentality, and you’re going to make it after all.


The way you make sure your money goes where you need it to go is with a budget. A budget helps you keep your priorities straight. Tuition and other college expenses come before a nine-day pass to Coachella.

But, we know you’re busy, and a budget sounds like an awful lot to keep up with. Just try EveryDollar. It’s free and easy to use, like a football left on the quad. Only, unlike the discarded football, EveryDollar helps you manage your money.

A Quick Note to Parents on Teaching Kids to Avoid College Debt

A Quick Note to Parents on Teaching Kids to Avoid College Debt

Let your kids know your family unit comes first.

First, you and your child both need to be on the “just say no to school loans” plan. That means they don’t take out loans, and you don’t take out loans. Work as a team to make debt-free college happen.

Second, you need to get your family in the right financial spot before you start saving up for your kids to go to college. How do you get there? Follow the Baby Steps.

Baby Steps before saving for college includes Baby Step 1, Baby Step 2, Baby Step 3, and Baby Step 4.

At first it may seem selfish, putting four money goals ahead of your children. But every one of those first four steps is about the good of the family. Baby Steps 1 and 3 provide security. Baby Step 2 brings freedom.

And saving for retirement (Baby Step 4) before saving for the kids’ college isn’t selfish either. Your kids may or may not go to college—but you will retire. Also, there’s no reason to send them to overwhelmingly expensive universities that’ll leave you unable to pay your bills when you quit working. Repeat after us: Putting retirement first is not selfish. It’s wise.

Open up a bank account in their name.

Before your little birdies fly out of the nest, get them started on the right financial foot. (Talon? Claw? What’s a bird foot called?) Open up a bank account in their name. Show them how to budget the money they earn from home or any job. And let them know there’s no shame in asking money questions, as long as they raise their hands and wait to be called on.

It’s Possible to Pay for College Without School Loans!

It’s Possible to Pay for College Without School Loans!

If you want to know even more about how to make all this happen, grab yourself a copy of Debt-Free Degree: The Step-by-Step Guide to Getting Your Kid Through College Without Student Loans, written by the previously mentioned expert Anthony ONeal.

Check out "Debt Free Degree" by Anthony ONeal

Because it is possible to pay for college without school loans! You know that now, right?

Yes, it goes against the norm of what society is telling you (the bad advice from those “experts” we shot down early in this article). But who wants to be “normal” if “normal” is $1.6 trillion in debt?

Answer: Not you.