I Asked 3 Financial Experts How To Send Your Kids to College Without Going Into Debt
Written by
Cindy Lamothe
Edited by
Levi Leidy
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Having your kid go off to college is an incredible accomplishment for most families. There’s no doubt that investing in higher education opens up the world to them and comes with many advantages. But it’s also not always financially accessible.
For that reason, planning ahead is your wisest option. GOBankingRates reached out to three financial experts to get their insights on how to go about it: Adem Selita, CEO and co-founder of The Debt Relief Company, Abid Salahi, finance expert and co-founder of FinlyWealth and Dennis Shirshikov, head of growth at GoSummer and professor of finance at City University of New York.
All shared their advice on how you can send your kids to college without going into debt.
Scholarships
“Scholarships are a surefire way to help students avoid debt while attending school,” said Selita. “The amazing thing about scholarships, there are so many that you have no idea even exist. If you and your child are go-getters, use this to your advantage and apply to as many as possible.”
He said you can apply through different colleges and universities but there are also many other scholarships offered by business and other unrelated organizations. These include but aren’t limited to: professional associations, local foundations, religious groups, civic groups, etc.
“On top of all this, there are also a multitude of private scholarships.”
Financial Aid, Grants and Work Study
According to Selita, financial aid and any assistance available via FAFSA will be a great help for many families looking to avoid unnecessary debt to help their children through college.
“Work Study programs are also a fantastic way to help students get some real-world experience while also avoiding debt as they attend university,” he said.
As far as financial aid goes, there are many local and state financial aid programs that you may not be aware of besides your free application with FAFSA. Selita added, “Almost every state has at least one grant or scholarship available to residents and many have a long list of student aid programs.”
Salahi also recommended this approach. “Scholarships and grants can drastically reduce college costs. Students should apply for multiple scholarships, even smaller ones, as these can add up.”
He also noted that many overlook local scholarships, which often have less competition. “I’ve seen students piece together $20,000 or more annually in scholarship funds through persistent applications,” he said.
Shirshikov noted that families can utilize financial aid to minimize borrowing. “Filing the Free Application for Federal Student Aid (FAFSA) is crucial, even if you think you won’t qualify for need-based aid.”
He explained that many schools use the FAFSA to determine eligibility for merit-based scholarships as well. “Families should focus on maximizing grants and work-study programs, which don’t require repayment.”
Additionally, he said to consider negotiating with colleges for a better financial aid package.
“Many schools have more flexibility in their aid offers than families realize, especially if the student has strong academic or extracurricular achievements. It’s worth having a conversation with the financial aid office if the initial offer doesn’t meet your needs,” Shirshikov said.
Early Savings Plans
On this point, all three experts were aligned that one of the best ways to avoid debt is to start saving early.
“529 Plans, ESAs and government savings bonds. Of these, all three have their benefits but 529 plans are arguably the most popular and advantageous since they grow free from federal and state taxes and also offer tax free rollovers to Roth IRA accounts,” Selita advised.
Additionally, he explained that contributions to a 529 plan from grandparents no longer count against financial aid and can help them avoid paying gift tax. “So, this can help gifting family members lower their future taxable estate. 529 plans offer a lot of flexibility and are a great vehicle for lowering tax liabilities,” he said.
Salahi agreed, noting that a 529 plan is an excellent vehicle for tax-advantaged college savings.
“Starting early is crucial for parents who want to send their children to college without incurring debt,” Salahi said. “Parents who begin contributing when their child is born can potentially accumulate over $100,000 by the time their child reaches college age, assuming average market returns.”
Salahi continued, “One family I advised started a 529 plan for their newborn, contributing $200 monthly. By the time their child turned 18, they had amassed nearly $150,000, covering a significant portion of college expenses without loans.”
Shirshikov added that the earlier families begin saving, the more time they have to take advantage of compound interest.
“A 529 college savings plan is one of the most effective tools for this purpose,” Shirshikov said. “These plans allow contributions to grow tax-free, and withdrawals for qualified education expenses are also tax-free. I advise parents to set up automatic contributions, even if it’s a small amount each month. Over time, this can make a significant impact.”
Consider Alternative Education Paths
For families seeking alternatives to the traditional four-year college experience, Shirshikov advised that attending a community college for the first two years can be a game-changer.
“Students can complete general education requirements at a much lower cost, then transfer to a four-year institution to complete their degree,” he said.
This approach, he explained, allows families to save tens of thousands of dollars without compromising the quality of education.
Additional Advice
According to experts, the most important thing is to start planning early, both in terms of saving and researching financial aid options.
“Break the process down into manageable steps, like setting up automatic savings, researching scholarships and staying informed about alternative education paths,” Shirshikov said. “Encourage your child to be part of the process as well, especially when it comes to finding scholarships and building strong academic and extracurricular profiles.”
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