College Without Debt: What's the Secret?

ThinkstockThinkstockBy Lynn O'Shaughnessy for CBS MoneyWatch.com

The majority of students who graduate from college leave with a diploma and student loans. Two out of every five undergrads, however, earn a degree without borrowing for college. In the most recent reporting year available, that equals about 1.7 million undergrads.

Who are these lucky students? Mark Kantrowitz, the founder of FinAid, a comprehensive financial aid website, decided to find out what kind of students managed to graduate debt free.


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Here is what Kantrowitz discovered:

1. Eighty-five percent of students who graduated with no debt attended public colleges and universities, and 78% enrolled in in-state institutions.

2. Selecting an inexpensive school was the best way to dodge student debt. Eighty eight percent of students, who graduated debt free, attended schools where the tuition was less than $10,000.

3. Only 30% of students graduating from private, nonprofit colleges left without loans.

4. Fifty-one percent of graduates of public institutions weren't burdened with debt.

5. The best way to accumulate debt was to attend a for-profit school. Only 7% of students who enrolled in for-profit colleges graduated with zero student loans.

6. About 75% of students with no debt spent $1,000 a year or less on textbooks.

7. Fifty-six percent of affluent students left college without debt.

8. More than two thirds of students, who avoided loans, received financial help from their parents.

9. Students whose parents earned advanced degrees were more likely to graduate without debt.

10. Forty-five percent of middle-income students incurred no student loans.

11. Thirty-six percent of poor students graduated with loans.

12. Half of students, who graduated with no debt, earned a degree at a community college.

Bottom line: While it might seem from media reports that nearly all students are reeling from college debt, a significant minority aren't. Just as importantly, three fifths of students graduate with less than $10,000 of college loans, which should be a manageable amount for many young Americans.

©2011 CBS Interactive Inc., a CBS Company. All rights reserved. Used by permission.

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