Is debt-free college really possible?

A reader in her 70s once asked me why kids today don’t do what she did: Work for a year after high school and save up enough to pay for a bachelor’s degree.

If you just busted out laughing, then you’re familiar with how high today’s college costs are compared with five or six decades ago. Even with substantial financial aid and one heck of a work ethic, it’s hard to imagine a high school graduate earning enough in a year to pay for four (or usually five or even six) years of college. The average annual sticker price for a public university is close to $20,000, while private schools average over $40,000.

The reason seven out of 10 college graduates have student loan debt averaging nearly $29,000 is that graduating without debt is hard. Really hard. (Paying it off is even harder.)

And much advice on how to graduate from college without loans is flawed, to say the least. Here are a few examples:

Go to community college! You can dramatically reduce the cost of a four-year degree by spending the first two years at a community college. But you’re also more likely to drop out. Only about two out of five students who start at a two-year college complete their studies within six years, according to the National Student Clearinghouse Research Center, compared with nearly 80% who first enroll in a public four-year institution.

Get a scholarship! Free money is great, but scholarships won’t necessarily help you get ahead. Scholarships can reduce the grant aid you get dollar-for-dollar. If you’re getting need-based financial aid, federal formulas require schools to lower your grant aid when you get a scholarship.

Work your way through school! A job in college can certainly help pay the bills. But let’s do the math. The average “net price” (the sticker price, minus financial aid) for a public, in-state undergraduate college is about $14,000 a year, according to the College Board. The current federal minimum wage is $7.25. After payroll taxes, that’s about $6.70 per hour. Which means you’d need to work 40 hours a week, 52 weeks a year — and that’s if you don’t owe any income taxes on your earnings.

People do work full-time while pursuing college degrees, but the key word is often “pursuing,” not “getting.” The more you work, the more likely you are to drop out. One researcher who looked at community college students found a 1% increase in wages was associated with a 4% decrease in the odds of completing a degree, and another researcher found that working more than 20 hours a week is as detrimental to bachelor’s degree completion rates as working full time.

Improving your chances

So what does increase your odds of graduating with little or no debt? Financial aid expert Mark Kantrowitz studied the issue in 2011, looking at a sample of 114,000 undergraduates. Here’s what he recommends:

Enroll at an in-state public school. The vast majority (85%) of debt-free students went to public colleges, with almost 78% going to in-state schools, Kantrowitz found.

Avoid for-profit colleges. Fewer than 7% of students at for-profit colleges graduated without debt, compared with 30% at nonprofit private schools and 51% at public colleges.

Opt for a two-year degree. On average, associate degrees increase lifetime earnings much less than four-year degrees. However, two-year degrees in a few fields actually pay more than the average bachelor’s degree. These higher-paying, lower-investment degrees tend to be in technical and health fields, such as dental hygienist (median annual earnings of $70,210, according to the Bureau of Labor Statistics), diagnostic medical sonographers ($65,860), web developers ($62,500), electrical and electronics drafters ($55,700), and nuclear technicians ($69,060).

Choose your parents well. Not surprisingly, more than half (56%) of upper-income students graduated without debt, compared with 36% of low-income students and 45% of middle-income students.

And here are a few more options to consider:

Attend a tuition-free school. Acceptance rates can be as low as those at Ivy League schools, but tuition-free schools are available to those willing to pursue a military career or follow a very specific course of study.  They include, among others, Deep Springs College in Big Pine, California; Curtis Institute of Music in Philadelphia; small religious schools such as Barclay College in Haviland, Kansas, and Berea College in Berea, Kentucky; and the five service academies:

• U.S. Military Academy in West Point, New York.
• U.S. Naval Academy in Annapolis, Maryland.
• U.S. Coast Guard Academy in New London, Connecticut.
• U.S. Merchant Marine Academy in Kings Point, New York.
• U.S. Air Force Academy in Colorado Springs, Colorado.

Military service also can offer help paying for college in the form of tuition assistance, Post-9/11 GI Bill benefits and loan repayment programs.

Enroll abroad. Public universities in Europe and some other countries are free or low cost, and some programs are in English. The Institute of International Education estimates more than 46,500 U.S. students are pursuing degrees abroad, including more than 16,000 in the United Kingdom, 9,000 in Canada, 4,500 in France and 4,000 in Germany.

Avoid ungenerous schools. If you do have financial need, understand that most colleges aren’t committed to fully meeting it. They will “gap” you, which means their financial aid package won’t cover 100% of your need. College consultant Lynn O’Shaughnessy recommends limiting your college search to those that meet at least 90% of their undergraduate population’s financial need. You’ll find this information on college statistics sites, such as the College Board’s BigFuture.

Nail your FAFSA. The Free Application for Federal Student Aid is the key that unlocks $150 billion a year in federal loans, grants and work-study jobs. It’s also a requirement for most grants and scholarships offered privately, by states and through colleges themselves. With a little preparation, completing the form takes about half an hour and results in detailed offers of aid at every school where you’ve been accepted.

Even if you think you won’t qualify for aid, fill it out, says Brianna McGurran, NerdWallet’s student loans expert. You just might be offered some assistance.

“Not filling out a FAFSA means missing out on potential financial aid that could make a huge difference in families’ ability to afford college,” McGurran says.

So, is debt-free college really possible? For many or even most people, no.

But education is an investment, and wise choices along the way can make the costs worthwhile rather than a lifetime burden.

Liz Weston is a columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: lweston@nerdwallet.com. Twitter: @lizweston. This article first appeared in NerdWallet.