4 Steps to Graduate from College Debt-Free

07/21/2014 02:33 pm ET | Updated Sep 20, 2014

The student loan crisis in America hovers at $1 trillion. Here's the most frightening part; 75 percent of this debt was accumulated between 2003-2011. This is a result of misguided teachers and parents encouraging their students and children to go to college even though an estimated 50 percent of college students aren't college material. To make matters worse, an entire generation of Millennials graduated from high school or college during one of the worst financial disasters in American history. Once they graduated they couldn't find jobs. So what did they do? Aided by the misguided counsel of parents, they went back to school to obtain more degrees and subsequently more debt and many of them still remain jobless. This epidemic has to end. Here's how to hack a college degree debt-free.

Before getting into each step of the equation, here are a few facts to consider that I have used in consideration of this formula:

$8,893 - $30,094: The average cost of college tuition and fees per year
(source: College Board)
$9,500 - $10,830: The average cost of room and board on a university campus per year (source:
$80,000 - $160,000: The total estimated cost of a 4-year university education
(based on the combined averages of tuition fees, room and board)

1) Live at Home
Let's face it, a large portion of kids look forward to going off to college to get away from their parents and experience freedom from rules and curfews. While this sounds like fun, it's a very costly decision. Since you lived at home with your parents for 18 years of your life, is 4 more years really going to kill you? Doing so would save you approximately $40,000.

2) Start at a Community College
Yes. I get it. The college life, the bumper stickers, the football games, the frat parties and the University tshirts are all very alluring, but these are smokescreens. If your driving motivation in going to college is having fun, you'll probably drop-out or flunk-out after your freshman year, so it's best you un-adopt this mindset right away. Community college doesn't sound as sexy as a university, but if you attend a community college your freshman and sophomore year, you could save $7,000-$28,000/year. This is based on the average annual cost of community college tuition ($2,076 source: College Board) vs. the average annual cost of a 4-year university tuition.

3) Work While Going to School
Intentional unemployment while going to school is one of the biggest mistakes college students make. Since they have no income, they typically borrow student loans to pay for their living expenses in addition to their college expenses. Since they view this money more or less as free, they borrow substantial sums of money and worry about paying it off later on in life. This of course, is total nonsense. The average retail/restaurant hourly wage hovers at around $9/hour which is a suitable part-time job for a college student. If you work part-time 20 hours/week, you will earn roughly $600/month net. Use $300 for entertainment and miscellaneous bills and use the remaining $300 to pay for school as you go. If you live at home, go to community college for two years and do the math, you'll see that you'll have $3,600 a year to be applied to your college tuition which leaves you with close to $1,500 left over after paying your tuition. Money left over? Imagine that.

4) Attend a Public In-State University
A survey conducted by Gallup and the Lumina Foundation found that of 623 business leaders surveyed, only 9 percent responded by saying that where a job candidate earns their degree is important. So why then are so many college students spending tens of thousands of dollars in additional tuition fees to attend private and prestigious universities that employers could care less about anyway? College is not and should not be an ego-trip, so choose wisely when determining what school you want to go to and make sure you're getting value. So many people say that "a college education is an investment." That is true. However, do these people practice what they preach or understand the true meaning of an investment? A savvy investor buys low and earns high. Why then do people flip the funnel when it comes to investing in their college education? Now that you know the facts and stats, you no longer have an excuse. Instead of attending a high-dollar out-of-state and/or private university, choose a public in-state university. Your wallet will thank you later.

Michael Price is an entrepreneur and author of What Next? The Millennial's Guide To Surviving and Thriving in the Real World endorsed by Barbara Corcoran of ABC's Shark Tank. An advocate of ideas for radical change, he has received critical acclaim for his lessons in education, career, entrepreneurship, and personal finance.

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