Book Review: Debt Free U

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Last week, I mentioned I heard of a book called Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents by Zac Bissonnette.  The title alone sparked my interest so I went to the library and checked it out.

It almost sounded too good to be true and I'm not exactly sure what I was expecting.  Maybe a way to cheat the system, stick it to the man, or just get some realistic advice on how to pay for school.  This book was written by a 21 year old college graduate.  He did not come from money, in fact, while writing the book his father's home was in foreclosure and his mom lived in a condo with her parents!  Zac, a financial wonder kid, was still able to go to a well known college without accruing any debt, at one point in the book he mentioned that at graduation he had one million dollars saved in his stock portfolio!  Currently he writes for AOL's Daily Finance blog, and contributor to many national financial newspaper columns.

 I dove right in to this book and read it in two days, but overall, I have to say I was disappointed. At this point in the game, for me, all of his advice was old news.  Here are just a few pieces of advice from the book, and how they relate to my college financial woes:

1.  How much can you afford and where will you get the money? 

Rather than actually answering this question, Zac spends a lot of time talking about how scholarships are few and far between - and really only pay about 1/20 of a student's overall college expenses.  He says student loans are dangerous and advises against them at all costs - citing that within 5 years of graduating 1 in 5 students default on their student loans.  He discusses that tuition & fees rise close to 18% every three years, and gives rough estimate costs of a 5 year education.  He also briefly touches on the downfalls of applying for financial aid and ways parents make mistakes trying to finance their children's education.

• I couldn't agree more about scholarships.  I graduated high school with a 4.17 GPA, I was involved in three Varsity Sports, and a myriad of clubs and other activities.  It did not pay off.  I received one scholarship from Target for $1,000, as well as a small in-state scholarhip that quickly ran out - and that's the only free money I've ever seen. 

• I never qualified for grants, because my dad made "too much money," however FAFSA didn't take into account that my parents had three kids going into college the same year, their own student loan debt, mortgage, car loans, etc.  FAFSA is great, but because it looks soely at income and not debts, it's not always realistic.

• Many parents save early for their kid's college, some borrow money or take loans from their retirement to finance their kid's education.  Bissonnette says this shouldn't be an option, which is good, because for me, it wasn't.  My parent's told us up front they couldn't/wouldn't give us money, but we could live at home while we went to school.

So where does is the money supposed to come from?  Bissonette says that all teens planning on going to college should start working summer jobs as early as possible.  This money should then be invested in high interest accounts and used to pay for college.  It makes sense, and would be a great way to teach kids about money, right?

When I was in high school, getting an education was my job.  My parents were completely against us working during the school year, but during summer break, we were allowed to work to earn some "fun money."  They were getting sick of forking over money so that we could go out with friends, and our allowance wasn't doing the job.  Every summer in high school, I worked as a Swim Teacher and Lifeguard, and I loved it!  I made about $200/week, which to me, at that time, was really good money!  However, with a job comes the need for transportation and therefore car payment, insurance and fuel costs. 

Contrary to Bissonnette's advice, I wasn't saving every penny earned, I was spending most of it on fun summer activities- you know, the whole reason for having the job in the first place.  By the end of my four years in high school, if I had saved all of my summer money, I could have saved close to $9,600!  That's half of my current student loan debt!  If I had invested it, and earned interest on it, I would have been much better off than I am today.  Instead, I started college with no savings and took out loans to pay for my education.

2.  Does It Really Matter Where You Go to College?

I found it amusing that most of the book dealt with the "dilemma" of where to go to college.  Is getting into an Ivy League school really that important?  Bissonnette points out that an education is an education.  What big name schools offer is prestige and networking opportunities and an empty wallet.  Many people think it's just fine to pay up to 40% more for a name!  Let's be honest, networking can be done at any school.  Like every other life experience, college is what you make it.  Success is not determined by a school, but by the person.  Anyone can turn an average Uuniversity into an Ivy League university if they want to.  He also recommends community colleges for general education requirements.  Tuition is often only 1/3 of what universities cost, and all credits are easily transferable.

•  I've never thought big name schools were worth the price, especially since I was the one paying for it.  Growing up, I always knew I'd go a religious private school, but when I didn't get accepted, I "settled" for my state's university.  I wish I would have taken advantage of getting my core requirements at the local Community College because I could have saved myself a fortune.  While Bissonnette stated earlier that every three years, the average costs for a college education raises 18%, my university is averaging 19% increases every school year!

3.  Make Money and Save Money

Did you know that most college age students spend 10.5 hours every week consuming alcohol?  How about 12 hours watching TV or playing video games?  There have been all sorts of studies done to show how much time college students waste "gaining a college experience."  Most of that free time could be used constructively in one of two ways: 

1. It could be used towards studying, and therefore getting through school faster.  Bissonnette points out that by channeling most of that wasted time towards school, students could easily graduate in three years, rather than the average of five it's taking most.   
2. The total amount of the average student's wasted time comes to about 35 hours each week - that is almost a full time job!  Bissonnette suggests that all students could successfully work a part time job (20-25) hours each week, have adequate time for study, and socializing.  It's about finding balance.  The money earned from a part time job at say $8.00/hour comes to about $3,200 each semester and would help pay for the next semester's tuition, fees, books, etc. 

Saving money is also relatively easy.  Bissonnette suggests not only working part time during a school semseter, but full time during summer and winter breaks.  Money earned should be applied to school and the rest should be saved or invested.  This is how Bissonette was able to become a millionaire by the time he was 21!  He also advises to stay away from using credit cards, creating a budget and sticking to it, and using wise finance practices- even taking a personal finance class.

Again, this would have been good to know when I first started college.  My parents didn't want me to work while in school, so I lived off of loans for my first two years of college.  Once I started working, I had credit card debt, and other bills that needed to be paid, so saving didn't happen, let alone funding my education.  And so the vicious loan cycle continued.

Is it worth reading?

I would say yes to those who are soon going to start college, or to parents of college age kids.  There is a lot of helpful information about the college planning process, that you may not know.  Most financial information provided by college financial aid departments and counselors is not very helpful, so any other resources are always good.  However, because this is such a large expense, this book should be coupled with other research and study. 

If you're just wanting an answer on how to get a cheap education, this is not the book for you.