What families need to earn for kids to graduate debt-free

Photo (c) Indiana University

You need $62,000 in Indiana but more than $124,000 in Hawaii

In recent years, it has become a given. If you plan to go to college, you'll be taking out student loans. Otherwise, you can't afford it.

Of course, that wasn't always the case. Until very recently going to college was fairly affordable. It might put a crimp in the household budget but most middle-class families could afford to send their children to college, especially a state-supported college or university.

But millions of students who took out loans to attend college in the last decade are now saddled with significant debt, preventing them from buying a home or making other purchases that young people often do when starting a career and family.

Now, students planning to attend college are looking for ways to do it without piling on the debt. But is that even possible?

You need a certain income

Personal finance site GoBankingRates.com crunched the numbers in an effort to answer that question. The editors determined that it is possible, but that it requires a certain income -- and that income varies by state, based on the cost of tuition at state universities and the cost of living.

In its state-by-state breakdown, GoBankingRates.com found Indiana requires the lowest annual income in the nation in order to send a child to a four year college without taking out a loan. The annual required income is $62,091. The average college tuition and fees in Indiana amounts to $9,200 a year.

Arkansas, Ohio, Missouri, and Kentucky are also in that range, with required annual incomes ranging from $62,596 to $64,111.

At the other end of the scale are Hawaii and California. Families in Hawaii would need an annual income of $124,454 to send a kid to college debt-free. In California, the required income is $106,771.

Tuition reimbursement

Of course, there is another way to graduate from college debt free. Just go to work for the right company while you are attending school.

Dozens of firms offer their employees -- even part-time employees -- tuition reimbursement as a perk. There are often conditions placed on this benefit, however. The field of study might have to fall within a set of guidelines. In some cases, you might have to commit to remain with the firm for a period of time after graduation.

You might also have to attend a particular school, and take courses online. Starbucks reimburses employees who attend Arizona State University online. Anthem has linked up with Southern New Hampshire University's online curriculum.

You can find a list of other companies that provide at least partial tuition reimbursement here.

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