According to the Project on Student Debt, the average amount of student loan debt a student accumulated by graduation in 2009 was $24,000. Though this figure doesn’t seem exceedingly high, it is only an average. For comparison standards, averaging student loan debt at $24,000 could mean that for each student who kept their debt under $5,000, there was one who applied for student loans totaling over $45,000. Not to mention that the weak job market won’t help students pay off that debt anytime soon.
So how can a student graduate college without a mountain of debt shadowing their path towards prosperity? Before I list some possible alternatives to finding free college money, let me first list some basic rules of thumb to keeping student loan debt to a minimum:
- Borrow only what you need. If you have the ability to work a part-time job while going to school, do it! If you can work over-time over the summer and save some money living with mom and dad, do it! Essentially, you only want to borrow money that will be applied towards school expenses like tuition and books, not pizza and beer.
- Keep your total student loan debt under your assumed first-year’s salary. For instance, if you are receiving a teaching credential and hope to find a job the first year out, you would want to keep that debt under the local district’s first-year teacher’s salary. Depending on your state, teaching salaries vary. Where I live, a first-year teacher can expect to make about $45,000 a year. If your profession’s average base salary is higher or lower, keep the debt under that base salary. If you can half-that amount of debt, you’ll be far better off.
- Pay off the interest as it accrues. It might be hard to scrape together $25 – $35 bucks a month and apply it towards your loans while in school, but if you can swing it, it will pay off when you are in the repayment period. The money you pay towards your loans while you are still in school is usually applied toward the principal. You can easily view how the interest is accruing, but you are keeping up with it by applying the extra payments to the original loan amount. Come graduation, you only owe what you initially borrowed, not the added interest.
Departmental Scholarships
Often overlooked, college departments frequently offer semester or quarterly scholarships with less competition. Depending on the student size of your college major, you might be competing with as few as 3 students for a handful of scholarships. Why is participation so low? Many students don’t know about these scholarships as they aren’t widely advertised and they often require a little bit of work such as recommendation letters, transcripts, and a written essay. From personal experience, I’ve received two scholarships within the past year totaling $1,500 with very little effort. I just made sure to submit my paperwork by the deadline.
Some schools have tuition awards available exclusively for adult learners, making it easier for these individuals to return to school. Many times, these awards are given to students who are new to the university and are enrolling in certain programs. For example, schools might give scholarships to students who are going after their Master of Public Health or Master of Science in Nutrition and Wellness. In some cases, these scholarships are even given out to online learners, which can provide additional motivation for those returning to school in the online format. All students have to do to become eligible is have decent grades and submit an application.
Aggregate Scholarship Websites
Quite a few websites list ongoing scholarships, grants, and fellowships from various schools, organizations, and private companies. Sometimes the scholarship or grant is specific to a field of study, but frequently it covers a broad range of subjects. Some of these websites include FastWeb.com, ProgramAdvisor.com, FedMoney.org, and Scholarships.com. I’ve personally used FastWeb.com in the past and though the competition is higher, it narrows down your search by selecting ones that best fit your profile.
Private Scholarships/Contests
A great way to find free money for college is by entering contests and private scholarship opportunities. The Yakezie Writing Contest offers three levels of monetary prizes for entering a writing contest every quarter. Contestants promote their essay and the top three with the most votes wins an amount varying from over $600 to $115 (prizes amounts may differ each quarter.) Since winners are chosen based on voting, they have the power to promote their own essay. Another writing contest is sponsored by SmithCompanies.com. However, the prize is limited to one monetary scholarship of $5,000 and is announced on Facebook.
Don’t forget to also visit your college’s financial aid office. They often have a plethora of information on grant and scholarship opportunities for students who are willing to do their homework. Graduating college with very little, or no, debt is a great step in the right direction towards a brighter financial future.
Readers, any other scholarship opportunities out there you know of? Did you graduate with a lot of student debt or not so much?
Great point on scholarships LH! I too always wondered why more students aren’t taking advantage of this. You won’t receive a scholarship unless you at least apply!
I’d also suggest setting aside a small percentage of your earnings (tips, jobs, whatever) as loan tax and keep pre-paying the loan.
Excellent post LH!
I agree that having a part-time job, even if it is only on the weekends, can be applied to loan tax and get those loans paid off quicker.
Nice post! I think keeping college debt to a minimum is one of the most important things to do early in life. I let my debt run a little wild in the final years of college, and it changed my entire lifestyle for 2-3 years after I graduated! Without that debt, I could be a lot farther than I am now.
At least you took care of most of it 2-3 years out of college. Most student debt haunts students well past 10 years! You were smart! ;)
Debt was controlling our lives! We felt the need to just get rid of it ASAP! It was the best move we ever made! :)
Great post! There is so much free money for college out there that is underutilized. For those that know, it is great because they can exit college debt free. But those that don’t seek it out end up paying in the long run.
Good information. I will pass it on to my high school students. Another opportunity to earn money for college may be a ROTC scholarship. It may not be for everybody, however it is merit based (2.5 GPA & 920 SAT). It can cover four years tuition and provide $3-500 per month living expenses. The best part may be a job after graduation.
That’s another great tip, Krantcents – ROTC. Any little bit helps to cover education costs.
When I was in school, I never imagined I could get any scholarship money. But, once I applied and tried I was 2 for 2! There is seriously so much money out there looking to help someone further their education, half the battle is really just to TRY!
The key is definitely to try! And talk to financial aid departments at school. They are a wealth of knowledge and can point students in the right direction.
I got scholarships and still took out student loans! I wish I would have lived like a college student while I was in school. But like Derek it will only affect me for the next 2 or 3 years. I can only hope college students will see that it’s ok to go to school and not take out student loans, you will be glad once you graduate.
Students definitely need more education on this subject – the less debt they have when they graduate, the better off they’ll be.
When you apply for a scholarship, always do some research on what the foundation/not for profit/scholarship fund promotes. Like applying for a job, showing that you have taken the time to really investigate the organization is the easiest way to get an edge on people who may be far more qualified than you are.
I never imagined getting a scholarship. I applied for only one. The application was nothing more than a couple pages of Q&A for the first round to weed out 90%+ of applicants. Next step was a 30-minute phone interview. All in all, it was the easiest $40,000 I ever “made.” I even got to fly out to a conference to meet other high school entrepreneurs. It was an excellent experience, and I would have never gotten the chance had I not taken the 2 hours (at most) that it took to apply.
If you have decent grades (I didn’t) there are 43985340593420 more opportunities. Cutoff is relatively low at 3.2 GPA or even 3.0. That’s usually what you need to have to be the in top 50% of your class, anyway. No one cares about your aptitude, just your dedication.
Also, apparently you can receive minority scholarships for being 1/8 of something other than white. If you’re 1/8th Native American, for example, some involvement in a local Native American not for profit is probably enough to qualify you for most awards. Some go as far as 1/16th. These are a lot easier to win than other scholarships because most people are still far too lazy even when it comes to free money.
Wow! $40,000 scholarship is really impressive! I bet that was the best use of 2 hours you’d ever experienced. Applying for scholarships is so worth the effort; the odds are in your favor. Thanks for sharing JT!
I think there needs to be more discussion on whether or not it is worth going to college in the first place! People just assume that you cannot go wrong spending any amount of money on college, but if you ask me, a liberal arts degree from a private school is not worth the wood it’s framed in…even though it cost you $90,000 plus interest!
Too many people go to college without any plan and with no real direction for their investment. Would you suggest someone put tens of thousands of dollars into a business with “I’ll try a few things and see what I like” as the business plan?
Of course not!
There are a whole lot of people doing whatever it takes to get themselves out of the job that college got that them, and it’s the student loans that make it impossible to leave the job they hate!
Fair points. Buyer beware of extraordinarily priced private schools. Hopefully there will be a bigger “buyer beware” type sense of urgency.
Agreed on that point Graham. People don’t need to spend $100k on private liberal arts degrees, especially when many private liberal arts colleges are ranked lower than cheaper public schools. (Although typically a lower-tier liberal arts college will have a couple of subjects that it is known for being the best in, as an overall education, or for someone who doesn’t want to major in those subjects, it’s definitely not worth it!)
Going to a cheap, public university never hurt my sister and I when we tried to apply to grad schools later.
I definitely agree that there needs to be more college planning in high school. More students may find that a trade school is a better option for them than a 4-year university. And as for private schools, I personally don’t see much point to them unless there is a clear plan of action and the networking will pay off 10-fold.
Great point Graham. I’m in school right now with a lot of folks racking up tons o’ debt with the false expectation that their income will automatically increase when they graduate.
It’s amazing with a little work how much money can be found. Only thing is there is rarely free money so always be very careful with the stipulations attached to it. My partner was on a scholarship requiring her to work 9 hours a week with the dept head, the job turned out to be more like 20-25 a week and she found it hard to back down for fear of losing the scholarship.
That’s a good point, Forest. There is also a teaching grant/loan that is similar to a work study grant but it happens after graduation. The student must work for 4 years in an impoverished school (or as a math/science teacher) or they must pay the grant back with interest. I’ve stayed clear of this grant/loan myself because I don’t want to be pigeon holed into teaching at a school that’s not my choice. Thanks for bringing this point up.
I wouldn’t have made it through college without financial aid and will always be grateful for that. Great point about departmental scholarships. I was able to get some help through a small scholarship that only a handful of people knew about and applied for. Research pays off!
Especially for study abroad – I didn’t apply for scholarships because a $100 and $500 scholarships just didn’t sound like much (I had no idea of the value of money at that time, but $500 is about a month and a half of rent where I studied abroad!). Also, I assumed I wouldn’t get it. Later, after I studied abroad and spent more time in the study abroad office helping other students learn abotu the process, I found out that several scholarships had gone completely unused for study abroad since no one had applied!!
Great post LH. In addition, don’t overlook the benefits of joining the military as a way to pay for college. The Army paid for my BS and MA degrees, and they’re paying for my MBA that I’m working on now. Great way to graduate debt free.
There are also several programs like the teaching one you mentioned. The obvious downfall (as with the military) is you’re locked into a length of time you have to serve in a specific area. Sounds bad but I found the time went by very quickly when I was on active duty and it was a small price to pay so I could graduate without debt.
Great post! It’s good to know that there are lots of ways to be debt-free when pursuing your college degree. I recommend that every student try out every scholarship they know of or can think of. Really helps! :)
Internships are not “free money” but they are a great way to build up experience and get money to pay your college bills at the same time!
[…] On the Yakezie – Finding Free Money for College […]
I wish that I would have made better choices when it came to my education. If I was focused when I first went at the age of 17, I would have had a free ride (through financial aid)! But I waited until my mid-20’s to get serious. Although, I was able to complete a BA and MA in a total of 3 years, I still amassed over $40k in student loans!
It pays to finish quickly, and get it right the first time!
Wow, how did you get a BA and MA in 3 years??
I worked the graveyard shift answering 411 calls in order to support myself. I was the music director at a church, to earn extra money. Then I took between 19 and 23 credits most semesters, including 12-15 each summer. I had to take classes on two different campuses in order to get everything in. Plus I only slept about 2 or 3 hours a day. I have no idea how I pulled it off (because I was preaching and teaching bible studies as well), but I guess I’m proof that it’s physically possible.
I’ll probably never do something like that again – even though I only get about 5 hours sleep now!
I often encourage people to apply for lots and lots of scholarships. As a college student, your time is better spent applying for scholarships than working (unless you’re working in an internship that can build your career). If you’re only working a dead-end, low-wage job with no career-building prospects, you won’t earn much … why not spend that time trying to go for a “big win” instead?
Great info. I am looking at going back to school next year, so this is very fresh on my mind.
I opened up a UPromise account for my neice and nephew in 2002. It only has $160 in it, but that is free money! I hope to get it to $1,000 by the time they are in college. (and then I’m sure Aunt Amanda will kick in matching contribution:)).