According to EducationData.org, total U.S. student loan debt is about $1.78 trillion based on its latest update. Recent Federal Reserve Bank of New York reporting also shows student loan balances around $1.65 trillion in Q3 2025, reflecting how large and persistent student debt remains.
For additional perspective, the New York Fed reports that credit card balances total about $1.23 trillion (Q3 2025). On the borrower side, EducationData.org estimates 42.7 million Americans have federal student loan debt, and reports an average federal student loan balance of about $39,075 per borrower (with total average balances potentially higher when private loans are included).
Benefits of Community College
Community college provides students with several options for career training and degrees. Here are some benefits of community college:
Lower Fees and Tuition
Regardless of your major or the college you attend, your first couple of years will primarily consist of the same type of classes.
For instance, each freshman and sophomore will take:
- English 101
- U.S. History or Civics
- Chemistry or Biology
- College-Level Math
Attending a two-year community college allows you to take your basic classes and get them out of the way. At the same time, you will save a substantial amount of money.
For example, Ivy Tech Community College lists in-state tuition of $5,156 in its published cost of attendance figures.
By comparison, Indiana University Bloomington lists $12,142 for tuition and mandatory fees for in-state undergraduates in 2025–2026. Ball State University lists $8,948 for tuition for Indiana resident undergraduates (with additional fees varying by program and enrollment). For private colleges, the University of Notre Dame lists $67,100 in undergraduate tuition for 2025–2026 (full-time).
Going down the community college path will decrease how much money you will need to borrow when transferring to a four-year college. In addition, you will still be able to apply for financial aid and scholarships for community college, further lowering your attendance cost.
Lower Living Costs
After heading off to college, the costs you will need to consider will not be just tuition. You will also need to think about the additional costs of things like:
- Living expenses
- Car maintenance
- Gas
If your school is in a different state, you will need to pay for a dorm room or apartment.
However, if you attend a community college for two years, that means you may be able to live home and save yourself hundreds of dollars every month in utilities and rent expenses. While it might not be as exciting as living in a dorm room away from home, graduating with over $40,000 in debt is not that exciting either.
Greater Flexibility
Imagine paying a high price at a university and then realizing the major you initially chose does not prepare you for what you wish to do. Even though you can still change your major, it could turn out that many of the classes you have taken will not count towards your new major. This is a great deal of money down the drain.
Going to a community college allows you to see how it goes for a little bit at a much lower expense than going to a four-year university. Explore various fields or classes to decide if your chosen major is the one you want to pursue after all.
How Do You Save Money?
College is costly, and not all families can save for a four-year college. Learn how a community college could help you bring costs down so you can save money:
- You could save a portion of your job earnings and put it into a 529 plan. The 529 plan earnings grow tax-free. You might also qualify for an extra state tax credit or state income tax deduction for your contributions.
- Start to look and apply for scholarships. Around 12.7% (one in eight students) in Bachelor's degree programs pay their costs using private scholarships.
- Ask family and friends for contributions to your 529 plan instead of holidays, birthdays, and graduation.
- On October 1, the year before attending college, fill out a FAFSA. Millions of students fail to complete FAFSA every year, and they could have qualified for financial aid.
- If required, take out student loans in a reasonable amount. You should look to borrow no more than what you expect your first year on the job out of college salary will be.
Transferring to a University
An associate's degree from a community college may be sufficient for you to pursue your chosen career. However, in many cases, you will need to further your education and obtain a bachelor's and maybe even a master's degree.
Going to a community college for a couple of years and then transferring to a university has benefits for any education plan. Tuition and other fees are substantially lower for community colleges than private and public universities.
If you have a target university in mind, make sure to research course requirements and whether the course work you take at the community college level is transferrable to that University. Most state higher education systems offer clearly defined transfer routes from a community college to a state university. Make sure your community college coursework meets their transfer criteria.
Takeaway
Community college can be the ideal choice to save money and decrease your dependence on a student loan. It is also a great way of easing you into college life and building successful learning strategies before transferring to a more costly university.