Like generations of parents before you, you want your children to receive a great education . But unlike previous generations of parents who could wrangle together funds, grants and student loans, today’s parents are finding that available financing for their college student is at an all-time low and tuition payments are the highest point ever. The gap between funding options and assistance programs has left many parents scrambling for more desperate financing which could leave a wake of financially destroyed lives in its wake. What are families to do to lessen the burden and still enable their children to receive a college degree?
Don’t put your family’s financial future at risk to pay for education. I have a few recommendations to help you do your homework and weigh the options before registering at the top-priced four-year school.
Examine some of the following options to help lessen the load and make obtaining a college education a reality that everyone can live with.
- Choose an accredited institution. Recently, ABC News’ Chris Cuomo reported on the University of Phoenix’s bilking of thousands of dollars from students by promising four-year degrees in education that would qualify them to teach in specific states. Their recruiters, paid on commission and enrollment incentives, actively encouraged student applicants to take the maximum amount of student loans available to them “even if they didn’t utilize the entire amount for tuition.” These border-line programs can cost students tens of thousands in unnecessary student loan debt and worse yet, leave students without viable careers after program completion. My advice to you – research whatever academic program you’re considering. Ask questions about accreditation, credit transfers, and job placement programs. Talk with students who have completed the program you’re considering to be sure that the institution has delivered everything it promised. A four-year degree program can cost upwards of $100,000. This is probably the largest financial commitment next to a home that you will ever undertake. Be sure your investment is a good one.
- Start at a 2-year school to reduce tuition costs. Credit hour fees are considerably less at 2-year institutions and can dramatically reduce the overall cost of obtaining a degree by almost half. A two-year college can also work in your student’s favor because the degree is quicker to obtain. For some students shorter, more achievable goals build motivation to complete even higher degree programs.
- Be a commuter student to save on room and board costs. With room and board costs nearly 1/4 of the total tuition cost at most 4-year colleges, your child (and you) can save somewhere in the range of $25,000 over four years by having your student live at home. While having a college student living under your roof may not be the ideal situation, the final debt ratio can be significantly reduced with a little more time in the nest.
- Investigate forgiveness programs. New federal programs encourage students to ‘give back’ to the community by agreeing to work off part of their student loans in at-risk or lower economic communities. Students can actually cut their student loan debt through “forgiveness programs” by nearly half to all depending on the program and length of ‘service.’ For example:
- Volunteer organizations: CityYear.org; AmeriCorps; Peace Corps; Volunteers in Service to America (VISTA); Equal Justice Works;
- Military service, Army National Guard;
- National – National Health Services Corps; National Institute of Health Nursing Services (Nursing Education Loan Repayment Program)
- Education – teach or practice medicine in at-risk communities; Us Department of Education Teacher Loan Forgiveness Programs
All more detailed list is also available at http://www.finaid.org/loans/forgiveness.phtml.
What can parents and students do before they get to high school graduation?
Look into college saving programs. There are many states that offer some type of pre-paid college tuition program via 529 Plans. Check with your state treasurer’s office for details. Additionally, 529 Plans are another option for establishing an educational savings account. Funds withdrawn from a 529 Plan are exempt from Federal income tax when used for college education expenses. Talk with a financial advisor before you set up any fund to be sure that you are receiving the most beneficial plan for your financial needs.
Meet with a college guide. These individuals are for-profit and charge a flat fee to assist parents and students find the most appropriate schools and the best funding options to pay for college. Using them can pay huge returns with scholarship and grant dollars that parents might have not otherwise known about or received. The recommended time to meet with a guide can be as early as freshman year of high school or even middle school if you’re interested in a private high school program.
Understand that your child’s dream college may not be the BEST place for him or her financially or even socially. There’s a saying that if you haven’t heard of the college that’s soliciting your child, it may be the perfect place for them. Smaller colleges and institutions often have more flexibility in financial aid and scholarship offerings than the larger universities and can often provide far greater personalized education and attention, too.
Do you have advice you can offer our readers? I’d love to hear it!