How I Graduated From College Debt Free Twice (and How You Can Too)

This is a guest post by Nathan Need.

College is expensive. In fact, it’s outpaced inflation by almost 2x for a decade, a virtually unsustainable trend that seems to be perpetual given the inelasticity of a college education in this day and age. Unless you are the fortunate heir of the lucky sperm club, you’ll probably need to pay for college yourself as well. I personally worked my way through undergraduate and graduate degrees, exiting both with positive net worth. It’s not easy, may require a bit more work than average, but it can be a huge boon on your options when you graduate. Here is my story.

My first venture began as a sophomore in college. My partners and I started a door-to-door sales company. The work was not easy, but the money was great. I can remember a specific long, successful day thinking to myself, “I just paid for half of this semester’s tuition.” It’s easy to get out of college debt-free when you have such an opportunity. Granted, the money was good, but the experience was better. Managing payroll for 25+ employees, stocking inventory, helping on the support calls and generally working to fix the headaches inherent with a service and installation business helped prepare me for the business of life much better than Accounting 101.

When I graduated with my undergraduate in business with minors in chemistry and biology (with a full intent to enter into healthcare mergers), I exited the program with five figures in the bank. That money not only gave me more flexibility to do what I wanted after graduation, but also helped me to start my next venture, a digital signage advertising company.

This particular business began about two years prior to my entrance into a full-time MBA program. However, because of the softness of the general market, overall advertising dollars waned and the business seemed to stagnate for months. In other words, sales and morale were extremely low. As fate would have it, the business didn’t begin to really expand until my MBA program got very intense during the end of the fall quarter. We had multiple proposals due for some very large potential international signage deals while I juggled the responsibility of studying for statistics and finance.

When I first entered the MBA program, I had somewhat dreaded the potential need to replay a nearly six-figure tuition sum over the next 30 years of my life, a possibility which left a very bad taste in my mouth. As luck and timing would have it, some of the larger deals closed just prior to the end of my program, leaving me flush with cash and ready to start something new. In short, I had a positive net worth and could cover my debts with the cash in the bank—what a relief!

I recognize my good fortune has an element of luck involved. However, I also recognize there are a few things each individual can do to ensure more luck comes their way. And when it comes to paying off college as the cost of tuition skyrockets, there are a few pointers that will better equip students to pay off debts much more rapidly.

  1. Try Multiple Things. Many people will tell you to avoid the entrepreneurial trap of attempting to be everything to everyone. The risk of spreading yourself too thin is certainly ever-present. Sometimes though, you’ll never know just which idea could have the biggest uptick unless you attempt multiple. This feat can be difficult during school, but is greatly doable. Whatever you do, be sure and measure the ROI of each activity so you can more easily determine those worth dropping.
  2. Outsource. If you can, get others to work for you. This includes both offshoring to less-expensive labor overseas. It also means that the principle of not becoming spread too thin from #1 could be offloaded to other people at a very small cost.
  3. Focus on Revenue. Maximize the amount you can make. This generally means not being the lowest bidder, being an effective salesperson and generally being focused on the top-line.
  4. Cut Personal Expenses. Another reason for my success in getting out of two degrees with no debt came because of my frugality (or cheapness depending on your perspective). I lived in cheap housing, rarely ate out and drove a 15 year-old car with nearly 300K miles. Not glamorous, but helpful.

College is a difficult time. It’s a time to figure out what you want to do with your life, make decisions about relationship and otherwise grow up. There are many decisions to be made which affect the outcome of many later events in life and most of them are within a small range of time. Perhaps the biggest portion of those decisions is the amount you will take on in debt. I can’t tell you what career to choose, although I’ve made suggestions in the past, but I can say from experience that being free of school loans can play a huge role in your future success.

Nathan Nead is a University of Washington MBA with a emphasis in finance.

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