Today, it's hard to get through college without taking out a student loan or taking on the burden of debt. The price of college keeps rising and there's less money to go around for everyone. You may not want to take out a student loan and avoid debt but, are there other alternatives? Let's explore a few options that may work for you.
Scholarships and Grants
Scholarships and grants are a great way to put yourself through school. It's pretty much free money if you can get it and there are scholarships for virtually everything. They come in all shapes and sizes, from under $50 to covering the entire cost of your degree.
There's also many services out there that will match you up with scholarships, such as scholarships.com. These tools will use the information you give them to find the scholarships that matches you best. This will help increase your odds of earning a scholarship and help you avoid wasting time chasing after ones that you don't qualify for. This is the best alternative to student loans as you don't have to pay anything back.
Pay your way through school
If you didn't get enough scholarship or grant aid to cover your educational costs, you can still pay your way through school. While not very attractive, working through school is a common option for many students. You can apply to nearby jobs or find a paid internship to help you earn money while in school. Internships also help you gain real world experience in a career that is related to your major, so they can be an extremely useful option whether you need money for school or not.
To help cut costs, you can avoid expensive Universities and go to a 2-year community college before transferring to a public university with cheap in-state tuition or even your dream school for half the cost. This route may not seem attractive at first because you want to go to a top university, but it is a good way to save some money on school and your degree will still show the name of the University that you ended up at.
Income Share Agreements as an Alternative to Student Loans
Another option that is picking up momentum is Income share agreements, a more socially responsible and balanced alternative to student loans. Income share agreements (ISAs), unlike a loan, are interest and debt free. ISAs also come with many built in protections for you, especially if you end up in difficult financial times. This includes not making payments when you lose your job or your income falls below a certain threshold. They also offer a payment cap if you do really well. This keeps it fair for all parties and aligns the goal of income sharer and investor.
Purdue University has been offering ISAs since 2016 and Clarkson University recently announced their own program. The state of California has also just passed a bill requiring the University of California system to develop ISA programs. Furthermore, Defynance is focusing on providing ISAs to refinance existing student loans. As the concept continues to spread and people begin to appreciate how ISAs are beneficial for everyone, they can become a common and easily accessible alternative to student loans.
