How to Save for College: 10 Ways to Graduate Without Debt

March 4, 2024

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If you’ve ever seen the heart-stopping results from a college savings calculator, you’ve probably frantically wondered how to save for college. Whether your kids are headed to college in a few years or more than a decade, check out these 10 tips to graduate debt-free. 

How to Save for College: 10 Smart Ways to Graduate Debt-Free

Currently, the average cost of college is just over $36,000 per year. If that isn’t enough to stop any parent in their tracks, the fact that many estimates predict college could cost up to half a million dollars by 2040 certainly will.

The seemingly ever-increasing college costs don’t mean that your children are destined for a lifetime of debt. In fact, if you start implementing these tips today, your children can minimize the amount of loans needed for college.

529 College Savings Plan

One of the most commonly talked about college savings options is a 529 plan. There are definite benefits to these savings plans, and they’re worth understanding as your family wonders how to save for college. 

529 Plan Basics

A 529 college savings plan is a state-sponsored savings account created for educational expenses. Funds can be withdrawn tax-free to pay for college or trade schools and related expenses such as housing and textbooks. 

Unlike traditional or high-yield savings accounts, the money within 529 college savings plans is actually intended to be invested. That means that your money can grow exponentially thanks to the power of compound interest. 

Don’t miss our deep dive into 529 college savings plans for more information!

529 Pros

There are so many benefits to 529 college savings plans. The first benefit has to do with taxes. Depending on where you live, a 529 college savings plan can actually come with a significant tax advantage. In addition to tax-free earnings growth and tax-free withdrawals, some people will also receive tax deductions for contributions. This varies widely by state and you want to do your research to learn more.

Another pro of these plans is how popular they’ve become. Like any investment vehicle, there are good plans and bad plans. But as 529 plans have increased in popularity, so have the plan options. Investors do not have to open a 529 plan in their state. In fact, if your state doesn’t offer tax benefits, you may simply choose to open an account elsewhere with the lowest fees possible.

Index fund superstar Vanguard is a big player in the 529 scene, which means that there are myriad options for low expense ratios. This is ideal in terms of helping your money grow while minimizing expenses. 

Another big benefit to these plans is that anyone can contribute to them. As a result, you might consider setting up a 529 plan for your child and then giving the details to family and friends. They can easily contribute to these accounts for birthdays, holidays, or other milestones.

529 Cons

While there are many pros to these accounts, there are some drawbacks as well. The biggest concern that people have with these accounts is the fact that they aren’t very flexible. In reality, that’s more of a misunderstanding than an actual drawback. It is easy to change the beneficiary on the account, meaning that if one child doesn’t use all the money, it can easily be passed on to another sibling, a niece or nephew, or even a grandchild. 

Additionally, if your child happens to score a scholarship, you can withdraw the amount of the scholarship from the 529 college plan penalty-free. Finally, 529 plans got even more flexible with the recent passage of the SECURE Act 2.0 which now says that a certain amount of money within the account can be rolled into a Roth IRA. 

Another consideration to make when it comes to 529 plans is the fact that they will reduce the amount of financial aid a student qualifies for in college. However, if the goal is to graduate debt-free, that doesn’t always mean qualifying for maximum financial aid.  

UTMA (or Kids Brokerage Account)

Another way to help your kids graduate without debt is to set up a UTMA account for them. UTMA, or Uniform Transfer to Minors Act, is a custodial account that is set up to hold the transfers for a minor until they reach adulthood. Said another way, it’s an account that can hold savings, investments, and other assets that become your child’s once they hit 18 to 25 years of age, depending on where you live.

Follow our links to learn more about UTMA accounts or get help setting up a brokerage account for your kids


One of the biggest benefits of UTMA accounts is how incredibly flexible they are. There are no stipulations on how the assets are used. That means that your child could use them to pay for college. However, your child might earn scholarships or save for college in other ways. Then, they would be able to use the assets in their UTMA to put a downpayment on a house, start a business, or pay for a wedding. 


There are several things you should consider before starting a UTMA. The biggest perk to a UTMA can also be its biggest drawback. If your child isn’t incredibly money-savvy when they reach adulthood, the UTMA account is still theirs. That means that they could loan the money to a friend, take a trip to Vegas, or blow the money in any other way that their underdeveloped prefrontal cortex thinks up! 

But let’s say that your child really develops a strong sense of financial literacy and only wants to use this money for college. They see the value in being debt-free! Assets in a UTMA account are weighted much more heavily in financial aid considerations. That means that a hefty UTMA balance will count against your family when you apply for financial aid much more than money in a 529 college savings plan. 

Working in High School

This hack isn’t snazzy or top secret, but it works! One of the ways to graduate college debt-free is through good old-fashioned work in high school. 

If this suggestion is giving you flashbacks to your own first gig, know that things have gotten better–sort of. There has been a strong push in many states and communities to increase the minimum wage. Plus, many companies and corporations are now feeling pressure to pay interns for their work. 

While we can’t promise that anyone’s first job will be glamorous, we are hopeful that the wages will be slightly better and hopefully the working conditions will be as well! 

The age at which your child can start working does vary a bit based on where you live. One solid strategy is to have your child reach out to their high school counselor to find out more about work permits. Additionally, the counselor could have connections or suggestions to make landing their first job a smoother process.

After you get your child set up with a job, make sure you set them up with a savings account. That way, they can start to set money aside for college and other expenses. After all, it isn’t just about what you earn; it’s what you save! 

Other considerations to make when it comes to working in high school as a way to pay for college are that some companies and organizations also offer support, incentives, or tuition waivers for college coursework. So if your child starts working in high school, they may continue to clock some hours in college and reap real benefits that way too. 

Savings Accounts 

You want to help your child or teen set up a high-yield savings account. Ally makes it easy but there are plenty of options! 

These savings accounts can pay considerably more than traditional brick-and-mortar banks. It also pays to do your research because many offer different incentives and sign-up bonuses. 

Your money won’t grow quite as much as it would if it was invested in the market, but if you have a shorter time horizon because you need the money sooner, these high-yield savings accounts are important tools.


We could dedicate an entire post to scholarships because they’re so important. Many families don’t even bother applying for scholarships because they feel like their child won’t qualify. That’s so silly. Don’t disqualify yourself before you even start the process. 

Kristina Ellis won a half million dollars in scholarship money, and she’s a great reminder that everyone should apply for scholarships. 

Top scholarship websites to help you save for college include:

  • Chegg
  • Careeronestop
  • College Board
  • International Student
  • Peterson’s 
  • Scholarship America

In addition to researching options online, students can also consult with their school guidance counselor. Moreso, if your child is taking the ACT or SAT, then there is often an opt-in for scholarships and other mailings that you can select. 

While the scholarship application process can be time-consuming, it isn’t that different from applying to colleges. After the first few applications, you start to understand and anticipate the application process. 


Grants are different from student loans because they typically do not have to be repaid. Students can find grant offerings in a variety of places. Federal and state governments often offer grants. Additionally, colleges and nonprofit organizations may offer them as well.

Some of the most well-known grants include Pell Grants and Teacher Education Assistance for College and Higher Education (TEACH) Grant. While grants typically do not have to be repaid, it is important to pay attention to the stipulations that come with these grants. For instance, the TEACH grant comes with a teaching requirement. If you do not meet the requirements, you must repay the grant. 

You can start the grant process by searching for federal grants on the U.S. Department of Education page or visiting your state’s Department of Education. 

AP Courses

AP courses are college-level courses that students can take in high school. After completing the course, you can take an AP exam. Depending on how you do on the test, you can potentially earn college credit.

The benefits of taking AP courses include:

  • Earning college credits and starting with a higher placement
  • Saving time and money in college
  • Standing out during the college application process
  • Freeing up time in college to graduate early, double major, or more

Initially, AP courses were rare offerings. However, over the last decade, the AP program has taken off in high schools around the country. Now, you can take AP classes in virtually every content area. 

Many high schools offer AP coursework in arts, English, history, social science, math and computer science, sciences, and world languages. These courses are designed for students who are academically talented and passionate about the subject area. Therefore, many high schools have a recommendation system or a placement exam for students to be enrolled in the courses. 

By taking several AP courses, or even just one, students can get a jump start on the general education requirements and start college with several credits to their name. 

CLEP Exams

CLEP exams are another way to graduate college without debt. The CLEP, or College-Level Examination Program, is a program that has been helping students get college credit for the past 50 years. 

How does CLEP help you save for college? Students can test out of introductory level classes. That means that they can jump into their college career at a more advanced level, possibly graduating sooner. 

The most surprising and important part of CLEP exams is that anyone can sit for an exam. That means that you don’t have to complete any special programming in school. If you feel confident and qualified, you can take the exam! 

Here are some other things you should know about CLEP:

  • Testing happens at CLEP centers or virtually
  • Scores are released immediately after the test in almost all cases
  • Tests are multiple choice and last 90-120 minutes
  • CLEP testing is available year-round at more than 2,000 centers 

While this program is lesser known than Advanced Placement courses, CLEP can play a key role as your family plans how to save for college. 

Working Part-Time in College

Colleges and universities offer a variety of different job options through their work-study programs. In many cases, you can opt to have your paycheck applied to your tuition. Another popular option to cut down on college costs is to apply to be an RA or a residential assistant. These peer leaders coordinate activities and help make dorm life smoother and safer for other students. As a result, they often have their housing fees reduced or waived entirely. 

Of course, you aren’t limited to working for your college or university. Students can explore jobs within their college community as well. In many instances, you may use part-time work in college as a stepping stone to a career path you hope to enter after graduation. 

Community College

One of the biggest mistakes families make when having conversations about college is overlooking options right in their backyard! Community colleges are often smaller schools that may be as close as in your same town. There are two main ways that community college can help when you’re wondering how to save for college. 

Associate Degrees 

Community colleges offer programming for associate degrees. In two years, students can earn an Associate of the Arts (AA) degree or an Associate of Science (AS) degree. 

According to College Consensus, some of the highest paying community college degrees include:

  • Advertising and Marketing Communications
  • Biomedical Engineering
  • Computer Science
  • Occupational Health and Safety
  • Network Engineering
  • Project Management
  • Nuclear Medicine
  • Software Engineering
  • Physician Assistant Studies
  • Radiation Therapy 

Once you have an associate degree, you can either transfer to a four-year school or start working. 

Additionally, you don’t have to get an associate degree at a community college–though you certainly can! Some students simply take coursework over the summer to get ahead before starting a four-year school or even while enrolled in a four-year school to save some serious cash. 

The National Society of High School Scholars estimates that local community colleges cost around $3,500 per year. Compare that to the NSHSS findings that show out-of-state public universities cost about $35,000, and you can see the savings add up!  

Dual Enrollment Classes

Did you know you don’t have to wait for college to attend community college? That’s right! Many high schools now offer dual enrollment classes. They go by a handful of names, but they all function similarly. Students can sign up for the classes in high school and then actually attend courses in person or virtually through their local community college. 

These courses satisfy high school graduation requirements and count on your high school transcript. That means that students can start college with credits. Talk about being a step ahead! 

Sometimes these courses are more specialized in content areas like cosmetology or engineering. Other times, though, they are general courses, including English, history, or mathematics. 

Final Thoughts on How to Pay for College

There’s no denying that the sticker cost of tuition is sky-high. But your kids don’t have to struggle with student debt for decades or years. With some careful planning and plenty of hard work, you can minimize the overall cost of college and the number of loans needed to get a degree.

If you're looking for more ways to ensure your child's generational wealth and happiness, check out our course Make My Kid a Millionaire!

What tips do you have when it comes to how to save for college? 

Please let us know in the comments below. 

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.

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