THE BLOG
09/21/2011 04:46 pm ET Updated Nov 21, 2011

To Pay or Not to Pay For College?

College students are coming up with their own creative ways to pay for college as skyrocketing tuition fees and tough economic times have made it increasingly difficult for parents and financial aid to cover the full cost of college.

According to a report from Sallie Mae, parents and scholarships cover the largest amount of the total cost of college for the average American family, at 37 percent and 33 percent respectively. However, students also contribute nearly a quarter of the total cost of college through their own income, savings and loans. At the rate of tuition hikes, students are primed to take on a bigger chunk of the financial responsibility.

The rising cost of college education is changing financial expectations of what it means to go to college. This generation of college graduates is tackling their college financial situation in radically different ways.

Free ride versus paying out-of-pocket

Take Aimee Louise Sison, whose parents offered some financial support for her four years at UC Berkeley. "I always had the financial safety net of my parents in case I ever needed it, but I enjoyed independence," she says. She chose to pay her own way through college using a combination of federal financial aid, several part-time jobs, internships, multiple student loans and a few credit cards.

"Paying your way through college gives you adult responsibilities at an earlier age," Sison says. "I would want [my kids] to work part-time and fight for paid internships too, instead of wasting their time and my hard-earned money partying for four years."

Other students had a very different take on what kind of freedom college offered.

Ramona Layug, also a UC Berkeley graduate, had her tuition costs fully covered thanks to her father's military veteran benefits. Instead of financial independence, she admits that freedom from finances was her luxury.

"To this day, I wonder how much harder I would've worked at school if the stakes were higher for me, like if my parents couldn't afford it or if I was paying my way through school," Layug says. She admits that the lack of financial pressure led her to "waste a lot of time not focusing academically for the first three years and more time on partying and social life."

Those partying days might be over for some college students. A recent study by Fidelity Investments shows that two-thirds of parents surveyed will require that their child maintain a GPA of 3.1 or higher in order for parents to fund their child's college education. Maintaining good grades to earn their college tuition payoff may help send the message to young people that a debt-free degree isn't an expectation, but a privilege.

Freedom seems to be a reoccurring theme for students lucky enough to get a free ride thanks to parents, scholarships and other means.

Veronica Flores, a graduate of the Class of 2010, says that the freedom her college fund afforded her was the best part about college. "I really appreciate it because [not worrying about paying for college] allowed me to really focus on my studies, explore my interests, and fully develop during my collegiate years," explains Flores.

Very few are as lucky as Flores. The average consumer has a student loan debt of $29,932, according to CreditKarma.com's latest video data report. Remarkably, according to one report, that actually might be a good thing.

A recent study by The Ohio State University found that young people age 18 to 27 felt "empowered" by their credit card and student loan debt. The more debt young people had, especially education debt, the higher their self-esteem and sense of control over their lives. However, survey participants aged 28 and older admitted that having debt became more stressful. Perhaps as they matured, the reality of paying off debt became more of a burden than an ego boost.

Kari Fuji found another way to boost her self-esteem and take control of her life.

"I will be graduating debt-free with built up credit, work experience and the satisfaction of knowing that I did it all on my own," Fuji says. As a student at San Jose State University, Fuji worked full-time from 9 AM to 6 PM and took classes from 6 PM to 10 PM and on weekends, plus took an extra year finishing up classes.

"I have envied those who can solely be a student, and wish that I could just focus all of my energy on school," Fuji explains. In the end, Fuji was one of the lucky ones who learned to be financially independent and also walked off with a diploma, debt-free.

The future of college costs

With the recent Budget Control Act of 2011 cutting federally subsidized loans for graduate students, young people are looking at even taller debt mountains if they keep climbing up for higher education.

"As I apply for my graduate degree, I now understand the struggle and frustration my mother had of dealing with paying tuition. How does one afford $15,000 a semester?" says recent graduate Shannon Zimmerman, who plans to pursue her doctorate in physical therapy.

That begs the question, is college really for everyone? While higher education is part of the ideals of the American dream, the real cost of higher education is edging out the necessity and practicality of a college degree.

A 2002 report by the U.S. Census Bureau set a grand expectation: an adult with a bachelor's degree can expect to earn nearly a million dollars more over their lifetime than an adult with just a high school diploma. While that may have been realistic in 2002, in today's scarce job market and exceedingly high education costs, I wonder if that college education is still worth a million dollars more today.

Justine Rivero is the Credit Advisor for CreditKarma.com, the pro-consumer credit advocate that helps more than 3 million consumers realize the everyday cost savings of having great credit health.