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There's a way to avoid many of the hassles associated with paying for college, but too few actually follow through. Photo: Flickr user Morgan.

Last week, a close friend and I were discussing the price of college. He contended that costs were out of control and too many recent graduates were saddled with too much debt. I conceded that this was a problem but that it wasn't quite as simple as that.

"You know," I said, "the real costs for private schools have actually been the same for over a decade, and most of the problems with toxic student debt actually come from for-profit schools preying on low-income students."

"OK," he conceded, "but even public schools are getting expensive, and a lot of people have trouble affording that."

I did some research, and it turns out he's right. Even if we only pay attention to net price -- which includes all forms of scholarships and grants -- costs at public four-year institutions are on the rise.

After accounting for inflation, the price of college has increased by an average of 3.1% per year since 1998. That means it's now 67% more expensive -- in constant dollars -- to send your son or daughter to a public college than it was in 1990.

"But," I told my friend, "there's another option!" And with that, I introduced him to fellow Fool Morgan Housel's plan for how non-rich people can graduate college without crippling debt.

Morgan's plan can be broken down into three simple steps:

  1. After high school, get a job, and see what life after high school is like. Give yourself time to mature emotionally.
  2. Go to community college for two years while living at home and working a part-time job. Apply for the right financial aid, and this could cost you almost nothing.
  3. Transfer to a state college to get your bachelor's degree. 

"OK," my friend said, "so how many people actually do that?"

That's a great question, and here's what I found.

How to pay for college with little or no debt
When millions of high school graduates headed off to college in 2007, they spread themselves between four types of schools: four-year public, four-year private, two-year public, and for-profit.

Here's the breakdown of where those students went, according to the National Student Clearinghouse.

Clearly, two-year colleges are popular destinations. Many young people pursuing careers as technicians, medical assistants, or registered nurses, for example, only need an associate's degree.

But to fully answer the question of how many follow some version of Morgan's plan, I dug further. Here's what I found.

  • Overall, 17.1% of students who started at a community college in 2007 had a bachelor's degree by 2013.
  • If you started at a community college as a full-time student, you had a 29% chance of obtaining your bachelor's by 2013.
  • If you started at a community college full-time before the age of 20, you had a whopping 35.5% chance of graduating with a bachelor's from a four-year institution.

If we look at all the students who started college in 2007 and had obtained a bachelor's degree by 2013, here's where they started.

Why don't more choose this option?
In the end, 14% isn't too bad of a percentage. That means these students may have obtained a degree that is helping them reach their goals without loading them up with crippling debt.

So why don't more people take this road?

There are many reasons. The most obvious is that some families have the means to afford other options, so their children go to their top-choice schools. Others are able to obtain grants and scholarships that don't make the pricier options unattainable.

But one insidious reason that too few talk about involves peer pressure. When all of your friends are headed off to four-year colleges, the average 18-year-old wants to follow along. No one wants to feel "left behind," and it takes a mature teenager to admit without shame that he or she is working and/or going to community college.

A 2007 study conducted by Krista Tucciarone and published in Community College Enterprise demonstrated that community colleges are largely denigrated when portrayed in mass media, especially movies. In the end, they are relegated to "second rate institutions."

A later study by Long Beach State University honors student Faith Proper hit the nail on the head: Of those who were satisfied with their community college experience, 78% said their friends supported the choice. Among those not satisfied with their community college experience, only 40% said they had friends who thought community college was a good idea.

I was lucky enough to have the means to attend the school of my choice without accumulating too much debt. But I know for a fact that the 18-year-old me would have fought tooth and nail against the idea of working or going to community college. At that time, it would've been very difficult to accept that fate.  

We need to acknowledge the power of that shame and peer pressure. We need to start talking about it. Once we do, the stigma associated with not immediately making the jump to a four-year college can fade away, which will undoubtedly lead to more reasonable debt burdens -- and financial freedom -- years down the road for our children.