6 alternatives to an expensive undergrad degree, and what exactly to do to avoid massive student debt

Boston Globe/Getty ImagesStudent-loan debt reached a national high of $1.5 trillion in 2019.

• Business InsiderFor Gen Z, avoiding massive amounts of student debt is a big concern, high schoolers and college admissions coaches say.
• The average student loan debt for someone in the graduating class of 2018 was $33,654, according to government data.
• A whopping 85% of college grads say they regret taking out as much student loan debt as they did, a Business Insider survey of approximately 2,000 Americans age 19-37 found.
• But there are ways to avoid graduating with a lot of undergraduate debt, including attending a community college or a public, in-state, four-year college.
• Here's what you also need to know about paying for college, including when to apply for FAFSA, and what conversations to have with your parents.
• This is a part of a series called Master your Money.

For 17-year-old Simone Spencer, choosing which of the hundreds of colleges across the country to apply to has been pretty easy.

"I'm not applying to private colleges, only public," she said. "It's simply because of the tuition costs."

Like many other Gen Zers, she's worried about incurring a lot of student debt.

For the class of 2018, the average amount of debt per person was $33,654, according to an analysis of the US Department of Education 2018 data by student loan and refinancing company Credible.

"I don't even know where to start," she said. "It's impossible for a lot of people to pay that off."

Simone SpencerSimone Spencer, 17, said she isn't even applying to private colleges because of the cost.Spencer, a senior at South Torrance High School in Torrance, California, is applying to one or two community colleges and a few public, in-state colleges. Her top choices are the two-year El Camino College and the four-year University of California, San Diego.

So far, her plan is this: attend a local community college for two years, and then transfer to a public, in-state college to graduate with a four-year degree in communications and go into public relations.

Her family has encouraged her to apply to private, four-year colleges, saying that scholarships can help her. But the high school senior isn't heeding their advice.

She said it boiled down to seeing her older sister's experience.

"I am six years younger than her, so I was around when she was going through the college application process. I knew how much she was going to be paying for school," said Spencer.

Her 23-year-old sister owes $50,000 in undergraduate student loans.

The high schooler's worry about debt is part of a larger trend, college admissions and financial aid coach Dean Skarlis told Business Insider. More of his clients, high school students and their parents, express anxiety over paying for college. He said he's seen a rise in the number of students specifically worried about college debt.

"Everyone's concerned about it - the price of college," he said.

And with good reason.

The average millennial is saddled with thousands in student loan debt; those in the graduating class of 2018 have an average student-loan debt of $29,800. They also still rely on their parents for money, have an overall net worth of $8,000 (which is worse off than previous generations), and are delaying life milestones such as buying a house, as Business Insider's Hillary Hoffower reports.

As our ongoing Master Your Money reveals, debt has shaped the millennial generation. Here's how Gen Z can avoid falling in the same trap.

Here are six alternatives to an expensive degree:

1. Consider a public, in-state four-year college.

Attending a public, in-state, four-year college is much cheaper than attending a private, four-year college, or attending a public, out-of-state, four-year college.

"The average in-state published tuition and fee price at public four-year institutions is 72% lower than the average price at private nonprofit four-year institutions," according to the College Board.

In 2019, the average tuition and fees total for a public, in-state college was $10,116 per year. The average per year to attend a public, out-of-state college was $22,577. And the total for a private college was $36,801 per year, according to US News.

When you factor in room and board, the average student budget for each year is $26,590 for a public, in-state school versus $53,980 for its private equivalent, the College Board reports. That's nearly $110,000 average savings with going public over four years.

2. Attend a public community college and graduate with an associate's degree, or transfer to a public, in-state four-year college after.

According to education website Community College Review, the average cost of public community college is $4,816 for in-state and $8,581 for out-of-state, which is significantly less than the cost of a four-year institution.

An associate's degree can set you up for a number of well-paying jobs, ranging from a cardiovascular technologist (2018 median salary was $67,080) to a diagnostic medical sonographer (2018 median salary was $68,970).

If a private, four-year degree is not an option for you, but you still want a bachelor's degree, consider attending community college for the first two years of your education, and then transferring to a public, in-state college.

That's what Spencer plans on doing.

"Me and a lot of my friends are going to community college just to save money," the high school senior said.

3. Look into trade school.

T.J. Gilbert, a 33-year-old father of two, is one of thousands of millennials still paying off their undergraduate student loans. He graduated from Virginia Wesleyan College in 2009 with $123,000 in debt, and says the debt has hindered his ability to save for his kids' future.

A whopping 85% of college grads said they regret taking out as much student loan debt as they did, a Business Insider survey of approximately 2,000 Americans age 19-37 found.

To avoid a similar fate, Gilbert advises young people to look into what jobs are in high demand and to consider vocational school.

"Educate yourself on all potential financial options. Research projections for in need occupations. Consider vocational school if you're attracted to a specific field," he said.

Accredited vocational schools offer a direct career path to jobs with good wages, such as careers in welding, to aviation maintenance to becoming a dental hygienist. In fact, Forbes compiled a list of vocational schools where graduates go on to earn the top wages.

To find a list of all accredited vocational schools in your state, check out this tool.

4. Research apprenticeships offered by companies such as IBM and LinkedIn.

To help fill in-demand jobs, companies like IBM and Toyota have spearheaded apprenticeship programs that don't require a college degree. IBM's apprenticeship program, for example, places high school graduates or students with a GED in roles such as "application developer apprentice" or "talent acquisition apprentice." LinkedIn has an apprenticeship program for prospective engineers open to people with an associate's degree, those who are self taught, and others. Toyota has its own apprenticeship program that places people with all education backgrounds in manufacturing jobs. To find more companies offering apprenticeship programs, check out the Consumer Technology Association's Apprenticeship Coalition page.

5. If it's not too late, consider enrolling in an early college high school.

Several states - from Maryland to California - have high school programs that offer students the chance to complete an associate's degree upon graduation. These programs are structured in one of two ways; The first is where students earn a high school diploma by 10th grade and get an associate's degree in the two remaining years of school. The second structure is four years of high school followed by two years of an associate's degree.

For example, P-TECH schools offer students entering high school the opportunity to graduate, in six years, with an associate's degree in applied science, engineering, computers or other competitive STEM studies. The program, developed by IBM, can offer a real chance at a lucrative career in high-demand industries. There are P-TECH schools located in Colorado, Maryland, New York, Connecticut, Illinois, Rhode Island, Louisiana, and Texas.

To find a program near you search online for "early college high school program" and your state or county.

6. Consider enlisting.

Enlisting does offer a host of financial benefits, including tuition assistance, loan deferment and potential loan forgiveness. Joining the US Military, however, is hopefully not a decision you make solely based on financial necessity. It's also important to note that joining the military doesn't guarantee financial freedom; many veterans still have student loans after active duty.

Four steps to take when deciding how to pay for your education:

Above all, Gilbert said, make sure your college decision seriously.

"Comprehend the financial commitment you are making and the long-term implications of this choice. Do not attend because your peers have selected to and society has force-fed this prerequisite for career success," the college graduate said.

He said that his college debt, and the interest that accrued on his loans, has made saving for his children's future "nearly impossible."

1. Have a family conversation early on in the process about how much your parents or guardians can realistically contribute.

Many families wait to see the offers that come in before devising a plan, and that's a mistake, according to Skarlis.

"Mom, dad, and student should sit down at the beginning and assess their affordability right from the beginning. Because the worst example is a student gets into their dream school, but the family can't afford it," the college coach said.

He deals mostly with families who are trying to decide between in-state public schools, out-of-state public schools, and private colleges.

Parents should sit down with a financial advisor, a college coach, or by themselves and go through three main topics. The first question to ask is: how much can you afford to take out of your cash flow each month? Many colleges have interest-free payment plans where the amount the parent owes after financial aid (which will be some portion of the school's tuition) is divided by the number of months in a four-year education (48 months). Each month, the parent pays that amount to the school.

The second is: how much can you take out of your savings? Do you have other children whose education you're saving for? Will this leave you with emergency savings?

The third is: how much are you willing to take out in loans? Can you realistically make the payments?

To calculate how much a family can afford, parents should go through their tax forms, bank statements, as well as look at their 529 plan, if they have one. A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs.

Skarlis, while admittedly biased, said college financial aid advisors can be very helpful with this process. The amount a college coach costs varies widely based on location. He is located in Albany, NY, and charges between $1,900 and $4,000 depending on the package the family selects.

2. Take note of all the financial aid deadlines, especially FAFSA, and apply on time.

Each college has its own deadlines for applying to financial aid. Make sure you know those deadlines and leave ample time before them to fill out their applications in case questions arise.

Secondly, get started on the Free Application for Federal Student Aid (FAFSA) as soon as it opens, which is Oct. 1 the year before a student would enroll. You have to fill out a FAFSA for each school year to qualify for grants, scholarships, federal work-study, and federal student loans.

The federal deadline to submit your FAFSA is June 30 after the year for which the student needs aid. However, each state also has its own FAFSA deadline, which is typically much sooner than the federal deadline. If you miss your state's deadline, you'll be eligible for federal aid, but not for state-funded programs.

To find out your state's FAFSA deadline, create an online account. In addition, the US Department of education has a handy guide for filling out the FAFSA, and NerdWallet created a helpful tool for understanding each type of federal grant and loan.

After ensuring your FAFSA is complete, wait until college admissions/financial aid offices reach out to you with their offer letters. To find out when you'll get these letters, you can contact each college's financial aid office, which you'll usually find listed on a school's website.

3. Search for private grants and scholarships.

The US Department of Labor has a free scholarship search tool you can use, and a website called The College Investor has a map tool that can help you find state grants you can apply for.

In addition, search online for private scholarships that you may qualify to apply for. For example, many scholarship opportunities exist for women, people of color, and students looking to study specific areas of study such as STEM subjects or writing.

4. Consider other loan options.

If after hearing back from the colleges you applied to, you still need money to pay for your education, consider additional loans. Parents can take out a Parent Loan for Undergraduate Students (a PLUS loan), and students can consider private loans.

Beware of private loan scams, however. And make sure you understand what you're getting yourself into - including what happens if you don't have a job or become disabled - before agreeing to a private loan.

To see the impact loans can have on the course of a young person's life, read our recent feature.

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