12 Practical Ways to Graduate Debt Free in 3.5 Years

University of South Dakota Student Shares His Journey

Alex Thomason graduated December 10, 2016 with a Bachelor of Business Administration in Finance degree with a minor in Entrepreneurial Studies from the Beacom School of Business at the University of South Dakota (SD) in  Vermillion. He graduated in 3.5 years and debt free.

The most frequent questions asked were HOW did you accomplish this without unlimited scholarships, loans or parental financial support when 44 million American borrowers owe nearly $1.3 trillion in student loan debt? How did you avoid an average monthly student loan payment of $350 after turning your tassel and collecting your diploma?

Click Here for State-by-State Information on Student Debt.

Smart Planning, Hard Work, Sacrifice & Creative Thinking

Alex is an only child. In some families this is the single most important variable to achieving a debt free college experience. Not ours. We voluntarily relocated from South Carolina to South Dakota at the start of the second semester of  8th grade. (Not the best planning to leave 82 degrees in January and arrive in sub-zero temperatures.). There were many roadblocks and challenges along the way. However, that relocation and the practice of Open Enrollment in the Sioux Falls, SD School District paved the way for most of Alex’s academic success and debt free graduation.

  • Get Career-Ready in High School

Middle school career tests revealed Alex has an aptitude for finance and business. He was encouraged to explore the Academy of Finance (AOF) within Washington High School (WHS). If you want to be a programmer, banker, baker, engineer or nurse, consider enrolling at a NAF-Be Future Ready affiliated high school. Most Academies offer college credits and paid internships. Some of his classes were taught by USD business professors. Others were led by high school teachers with real world accounting and business experience. Professor taught classes earned college credits. Credit hours were charged at a much lower rate than if he’d have taken those courses enrolled as a college student. Alex entered college with 7 credits-a half semester worth of credits before stepping foot on campus.

Passing Advanced Placement (AP) course tests earns college credit. Many high school students take advantage of AP classes to earn college credit before going to college. Because there was little leeway in the AOF core requirements, Alex only completed three AP courses. Explore AP courses while in high school. Early on, ask your guidance counselor about AP courses and which ones to take for your expected college major.

  • Start 529 College Savings Program

Teach savings and big picture thinking at a young age. [Consult with a tax or financial advisor for more information on 529 Plans.] Replace some toy and other material gifts with contributions to the Plan. And, when age appropriate, talk to your child about the Plan so they take ownership and are invested in the education savings plan.

Like most young boys, Alex enjoyed gaming systems. However, he was strongly encouraged to limit purchases and contribute half of all cash gifts to his 529 plan. It was a disciplined trade-off and difficult sacrifice. The rewards of this discipline are now fully understood as a young adult with degree in hand.

  • Work and Save While in High School

Yes, some families need the income from the jobs their children have while in high school to offset household expenses. If yours doesn’t, your child working while in high school is invaluable for future employment. Of course, the money earned and saved is excellent but so are the skills learned.

As one who’s hired and trained interns and new college graduates, I always gave greater weight to applicants with high school and college work experience. Having the discipline to show up to work, contribute fully on the job and manage a school and extra-curricular workload were signs of future success. Discipline, time management and dependability are timeless, valued skills learned while working as a young adult.

  •  Non-Traditional Contests

Unless you are cash rich and super smart, you’ll most likely have to find funds for college. Think about your strengths and your career path. Alex happened to like business and entrepreneurship. So, he did online research to find business plan and essay contests to enter. He found three business plan competitions in South Dakota:  The Big Idea, Bankers Association and The Governor’s Giant Vision Student Competition. Alex placed in all, earning $5500 in cash awards. He also won second place and $5000 in the South Dakota State Securities Division Essay Contest.

Keep in mind that these contests are student-driven. It is up to the student to take the initiative to come up with a business idea, enter the contests and meet the requirements. If you rely on the school or a teacher to lead you, you will be disappointed.

Whatever your interests, do the research to find contests with award money to offset college costs. The truth is few enter. It takes a lot of extra work. Those who enter are rewarded not only with prize money but invaluable experiences and professional connections.

  • Scholarships

Everyone knows scholarships are available for college expenses. In fact, go to any bookstore and you can find volumes of books with lists of available scholarships. Don’t forgot to look locally. Alex applied for a number of scholarships through the Sioux Falls Area Community Foundation. He was awarded several. The challenge he found was that our family income was too high and his GPA, while good, was not exceptional. He was caught somewhere in the middle. This makes the hunt more challenging, but not impossible. We did attend several poorly attended parent meetings at his high school on college financing. The information was good but, once again, scholarships seemed more readily available to those with lower incomes and those with superior academic grades.

  • Get a Great College Advisor

The value of a knowledgeable college advisor cannot be stressed enough. There are certain classes that must be taken and passed to earn a degree. Sometimes these classes are only offered certain semesters. Missing a class can postpone one’s graduation by a semester. Therefore, being assigned a great college advisor and taking ownership of one’s own path through college are essential to graduating on time.

  • Choose Right College

Alex was fairly certain he wanted a career in insurance and/or finance upon graduation. There are certain colleges that specialize in risk management and insurance. The summer before his senior year we visited three: Florida State University, the University of Georgia and Georgia State University. Each offers an outstanding curriculum. After touring each school and meeting with professors and department leaders, Alex chose to continue with the professors and the coursework he had started at USD while a WHS student.

On his own, he calculated the expense associated with out-of-state tuition and forecasted projected income post graduation. The fact that the Beacom School of Business has an accreditation from AACSB and regularly appears on the US News & World Reports Best Colleges Rankings List played a part in his choosing USD.

  • Work During College

Alex was so focused on graduating college without debt that he worked during college. He got up early and served breakfast to hotel guests and for the last two years worked on the campus grounds crew. He did everything from trimming grass to shoveling snow to planting trees. This was manual labor totally unrelated to his career choice. However, he took great pride in the appearance of the university and the safety of students and staff, even returning to campus while on winter break to shovel sidewalks and de-ice steps. Graduating debt free was the goal and he took pride in whatever job he did to achieve this goal.

  • Share the Rent & Buy Used Books

I have to admit that the roommate issue concerned us. We wondered how he’d adapt to sharing space with another student since he’s an only child. It didn’t matter. He easily adapted and had a roommate every semester. He lived on campus the first two years and off the next year and a half. Alex also researched the most affordable sources for classroom books and sold them back when the class was completed.

  • Take Online Summer Classes

Alex secured two summer insurance brokerage firm internships. In addition to working 8-5, he took online courses for two summers. Once again, this takes discipline and focus. Instead of going to the beach or attending parties, he was working and studying. He did have fun, but  kept his eye on the prize-graduating in 3.5 years debt free.

  •  Drive a Used Car, Drink Water + Choose Friends Wisely

Social costs of college can add up. Beer drinking and partying are expensive. Alex visited fraternities, but chose not to join. He decided there would be little time between studying and working to participate in the many charitable and social events offered. It’s worth noting that friends greatly affect student success. Alex has always chosen friends who share his values. It’s both a skill and a gift.

Alex is driving a 3rd generation car. It doesn’t have anything fancy on it, but it does get regular oil and tire changes. The moral of the story-keep costs down and only buy what’s necessary.

These are the 12 ways one student achieved his goal of graduating in 3.5 years debt free with a B+ average. 

What other ways can you add? List them below in the comment section.

Share with families in the midst of college financial planning. They will thank you!

 

©Copyright. December 2016. Linda Leier Thomason

All Rights Reserved.

 

 

 

 

 

 

One thought on “12 Practical Ways to Graduate Debt Free in 3.5 Years

  1. Congrats to Alex.

    I didn’t quite graduate debt free. Heck, I didn’t even graduate. But I did have all debts paid off within a few years. I paid for about 1/3 of my schooling. My parents paid for about 1/3 of my schooling. And scholarships, grants and student loans paid for about 1/3. I dropped out after spring ’93 and had everything paid off (school, credit cards, car loan) by summer ’98. I don’t know how much things have changed in financial aid packages since I was in (I’m assuming quite a bit of change, but who knows), but one of the things that irked me coming out of high school was that they counted everything I made at my high school jobs as being available for tuition.

What do you think? Let me hear from you.