“The debt is just short term”, “it’s the only way to get the job you want”, “you’ll never make any money without a degree” are common college myths. Let’s discuss the most important: whether a college degree is worth going into debt over, and what the alternatives to college debt are.

College Is Expensive

Education costs are spiraling out of control. A recent report by CNN’s Money Magazine even quotes the former U.S. Department of Education’s Commission on the Future of Higher Education as saying:

“If college costs continue to escalate at this rate, you may reach a point where the investment simply isn’t worth it.”

Have you reached the point where spending the money simply isn’t worth it? How do you know when you’ve reached that point?

It doesn’t take a PhD (pardon the irony) to acknowledge the incredibly increasing costs of a college degree. Money Magazine reports that the college costs are increasing four times the rate of inflation.

Private institutions charge an average of over $20,000 per year for tuition alone, meaning lifestyle costs aren’t factored in yet. All in all, going to school can cost up to $50-100,000. In order to understand this number, let’s take a step back and analyze three factors.

College Debt Ruins Lives

These aren’t just scary numbers; behind every debt statistic are thousands ruined lives. Take Kristin Cole, for example, as reported by The Seattle Post-Intelligencer:

Kristin Cole, 30, who graduated from Michigan State University’s law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices.

“I could never buy a house. I can’t travel. I can’t do anything,” she said. “I feel like a prisoner.”

The college myth proclaims that the debt is just short-lived. For many, this simply isn’t true. SmartMoney reports:

Vickie Hampton, an associate professor of financial planning at Texas Tech University, knows that being well educated can make you poor. A colleague of hers, she says, racked up more than $100,000 in debt while earning a Ph.D. in English. “There’s very little probability of her paying that off in her lifetime!” Hampton says.

Lifelong-debt is no laughing matter. College debt is destructive on two levels:

• Current funds. A portion of your paycheck will go to the debt, meaning a house, nice car and everyday luxuries simply might not be open to you for years.
• Future Funds. A dollar of debt is an anti-investment. Over the course of one’s life, investing $1 at 18 or so means having roughly $10 at retirement given 5-8% return. This means that spending $100,000 for college is actually spending $1,000,000 in terms of actual spending money later on. That’s without factoring in interest, meaning the actual figure is much higher.

But the college myth proclaims that it’s a necessary evil. Without that degree, you’ll be financially backward for the rest of your life, so goes the myth. This simply isn’t true as we discussed earlier in the article Most Don’t Need a College Degree.

So what are the alternatives to college debt? Is there a way of getting the degree without racking up the costs? Remember, debt is always a choice because there are always alternatives to debt.

Alternatives to College Debt

Debt is most certainly not the only option when it comes to paying for college. If anything, college debt should be the last option. I personally chose to go completely without debt — I’d choose no degree over substantial debt for a degree.

As far as the actual alternatives:

• State Schools — State schools average a little over $6,000 per year, with private institutions at over $20,000. Less prestigious? Probably not $50,000+ worth.
• Community College — Community colleges can be extraordinarily cheap because they serve in the function that a real college should: to give anyone and everyone an education. No elitism, just a cheap education. Don’t think that it’s so less prestigious that you can’t make it in the real world; some places, including Stanford, accept some community college students.
• Pay-As-You-Go — This seems to be a forgot method. Paying for a year, taking a year off, saving money and paying for another year. It might take a few extra years, but the end result is absolutely no debt. Oddly enough, this can actually be much, much cheaper than going into debt.
• Scholarships — There are literally tens-of-billions of dollars in scholarships. The VFW, Target, Wal Mart, Coke, almost every company and organization gives out scholarships. If you have a great writing ability, there’s almost no excuse for not making use of the scholarships. In the next article I’ll show how you can search for your own using online databases, so make sure to subscribe.
• Don’t Get a Degree — I’ll be one of the few who would actually suggest this: statistically, most of the readers of this article don’t need a degree to become successful. Most people don’t have a degree, and if you decide that entrepreneurship is for you that’s another reason to not worry about the expense. Instead of paying for your degree, you could save the 50k and put it towards starting your own debt-free business.

Significant debt isn’t necessary to get a degree. Using the methods above, one can completely skip the decades of having the debt on the back of one’s mind. Debt destroy’s lives and ironically destroy’s one’s ability to succeed, if the debt is large enough. Don’t go into debt for college unless absolutely necessary.

I’ll be writing more about rethinking popular college beliefs, including specific ways to find great scholarships regardless of your skills or portfolios. Make sure to subscribe below!

Related posts:

1. Most Don’t Need a College Degree
2. Rethinking College, a Series of Articles
3. Save Money or Make Money?