College is a BIG Investment in Money and Time

School DebtCredit: cory stophlet, 2014Are you planning to work two or three jobs simultaneously in order to pay your way through college? Many students find themselves in that very situation; others find themselves having to work extra jobs after graduation in order to pay the accrued debts from student loans. It’s not just tuition costs to be concerned with, it’s also cost of books, lab fees, school supplies, residence costs if you plan on campus living (add to residence costs – meals, living costs, etc.). Not everyone has parents with the financial capability to cover their children’s college tuition. If you are a parent and fully intend on providing the funding needs of your off-spring’s higher education, you need to start setting aside money as early as possible. Whether a parent planning for their children’s future or you yourself intending on going to college, you must plan ahead to avoid long term education debts.

Your goal should be to graduate from a school that you can afford, with a degree that will secure you a career without a mountain of student debt. Consider the following statistics when you are selecting your school and potential debt:  According to the Consumer Financial Protection Bureau 2012 report and Uniformed Services Automobile Association (USAA), the average student graduated with a debt of $29,400 to be repaid. In-State School average debt was $18,391; Out-of-State school debt was $31,701, and Private University and Ivy League average debt upon graduation was $40,917.[1] That debt is a lot of money to be saddled with after graduation.  How can you accomplish this goal and where should you start?

Rising Cost of College

Start a Cost Management Plan

Career, School and Program Major Planning

This is a plan as to how you will acquire the needed funds to complete your degree or certification requirements. This plan also includes the selection of a college/university or trade school, if appropriate.

BusinessMeetingCredit: cory stophlet, 2014

What do you want to do for the rest of your life? College is a serious investment in both time and money. Ensure that you are making your choice based on a career goal and not just to get a job. What’s the difference between a career and a job? A career is something you want to do for the bulk of your adult working life; while a job is something you do because you need the money. Don’t pick the school first, pick the career goal. Don’t put all your eggs in one basket. Have more than one career in mind before selecting a major.  You will likely have a career in mind that you really want to pursue; that’s plan “A”. Have a plan “B”. Unfortunately, we don’t always get our plan “A”; sometimes things just don't work-out. What else might you consider as a career? Or, is there a job that you would consider performing while you continue to pursue your real desire? In any case, the degree and major you chase must be adaptable for plan “A”, plan “B” and or “job”.      

Know why you are selecting the program major. High school students often plan their major based on what sounds fun or interesting without considering whether or not it will lead to a career; or, their career expectations are a bit unrealistic. There are a lot of college graduates in the world with degrees in engineering, psychology, management, history, (and many other majors) that end up working after college in fast-food, waiting tables, big-box stores stacking shelves, and servers at coffee shops. Not all degrees lead to the profession you desire.

Some careers require more than the degree, some less, others a technical certification instead of a degree. There are careers that require a certification on top of the college education. Most K-12 school teachers must have a teaching certificate on-top of the four year degree. In some cases, maybe a four-year degree isn’t necessary; a two-year associate’s degree or technical school qualification might just be the right choice for you. Different medical careers have different requirements: nursing school, versus nurse practitioner, versus physician’s assistance, versus medical school. Law careers have the same considerations as medical school: paralegal versus law degree. Know the commitment you are endeavoring to achieve. What level of education and or certification is required? How long should it take? Often times a student might need more time to complete the program if they have to work at the same time in order to pay for school.   

The Career Guides the Choice of Degree Major and Certifications

Select a major that will lead to a realistic career; something you can actually achieve. Choose with the end-state in mind. This means that you must set yourself up to succeed. Sounds easy right, not actually. Many of us have dreams of grandeur only to have them dashed not long after graduation when, with diploma in hand, we can’t find that high paying career we had hoped for and we still have a mountain of student loan debts to pay. Failure to plan and choose wisely and realistically can leave you owing money for many years subsequent to graduation.

Pick the Right School

Do you really need a four year degree to achieve your career choice or is a two-year program or technical/trade school more appropriate to your needs? In many cases you can always apply for a four year program after you’ve finished a shorter program. For example, if you determine that you can achieve your career choice with an Associate’s Degree (two-year), then later, if you choose, you can apply to a college/university to get those two-years credited course work applied towards the next level degree and continue towards that next educational goal.  Are you planning on a career that requires a graduate degree (Master’s), Law Degree with License, or Doctorate/PhD, Medical Degree and License? These are the type of things you should account for before selecting a school. They all affect the cost.Exterior of the University of Tennessee College of LawCredit: Jake Sumner, Creative Communications, University of Tennessee, 2009Select a college/university that best suits your “realistic” financial capabilities or resources, as well as the career goal. It is rare to find a business that concerns itself with what school you graduated from; they are only concerned with whether or not you have the degree and the necessary skills to go along with the education. An Ivy League education might look great on a resume; however, it is not a guarantee of a career – unless of course the business you apply to has a lot of alumni from that same school. 

Community College: can be either two or four year schools and usually smaller student population and have fewer Major options.

Public State College/University

California State University Dominguez HillsCredit: Coolcaesar at en.wikipedia, 2011

In-State versus Out-of-State: Will the attendee be an in-state student or out-of-state student – there are cost differences for each? In-State refers to a student attending a school within the state they currently resident; while out-of-state, refers to a student that enrolls in a school in a state they do not live in. Out-of-State students pay higher tuition fees than in-state students.

Private College/University:  This includes Ivy League schools, like Harvard, Yale, and Cambridge. Although these are great institutions with equally great reputations, their fees are significant. You can expect to pay as much as double the fee of an In-State college/university.

Distance Learning/Online College/University Programs are fine options, especially if you have some college/university credits previously completed and/or you have been away from the classroom environment for a long time. These schools are good options if you work a full-time job and it is impractical to try and fit attending an on-site classroom into your busy schedule. Work-at-home family members are great candidates for these programs since family members in this situation are well versed at balancing and managing business tasks with home tasks. 

Technical/Trade School: Some careers, especially trade careers such as electrician, construction, metal worker, welder, auto repair and many other respectable careers are best pursued through a technical or trade school: not a traditional two or four year college program.

College Costs

Ways to Pay

Savings and Investments

A 529 College Savings Plan: This is a savings program that has a tax-advantaged designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the U.S. Internal Revenue Code.

Coverdell Education Savings Account: This is another tax exempt savings account for education; however, it has a contribution limit of $2,000 per year.

U.S. Savings Bonds: Some bonds are tax exempt when used for education funding. Check with your bank or investment agent to find out which fund works best for your needs.

Certificates of Deposits (CDs): This is an option that is often forgotten. You can establish several CDs with varying duration of maturity, and as long as you keep up with those dates, and continually roll them over to new and higher yield CDs, these are quick, easy, and locked in funds that will be available when they are needed.

Ugift: This is a savings and contribution program for families and friends of a child or students. Family members and friends can make contributions into the plan strictly for education use.

Regular Personal Savings Account: This is an easy one to set up but hard to keep your hands off of over a long period of time. Interest rate earnings are not that great so don't expect your money to grow very much. You really need to focus on disciplining yourself to deposit a set amount every month. This works best if you set-up a direct deposit or automated transfer into this college savings account.

Scholarships and Grants:  There are many scholarships and grants to try for; however, most of these are athletic and academic oriented. There are other types associated with special programs and sponsorship programs. Check with you school counselor and the college/university admissions office for available options.

U.S. Military Service: Every branch of the U.S. Armed Forces has the same college benefits package that will help a service member pay for school after they finish their service commitment. In some cases, you can actually start college while you are still in the service. The U.S. Air Force and the U.S. Army have their own community college accreditation to award college credits for equivalent military training courses. For example, an airman or solder attends and completes their training specialty in one of the electronics fields will be able to get college credits in equivalent college science and engineering course work.  

Reserves Component Programs: Most Army and Air National Guard organizations for throughout the U.S. have some form of tuition assistance program; this is a separate program from the active duty military veterans’ benefits. You will need to check with your State's National Guard website for information as to what is currently available.

Reserve Officer Training Course (ROTC): There are scholarship programs that are oriented towards ROTC; you will need to check with the ROTC (Air Force/Army) representative for available options.  

Service Academies: Air Force Academy, West Point, and the Naval Academy are options to have your school tuition paid for by the government; however, the catch is that you are committed upon graduation to serve in the military on active duty for a specified number of years. You also have to be recommended and sponsored by someone, usually a senior military officer or Politian to vouch for you as a good service candidate.

Post 2001 GI Bill Education Benefits for Dependents: Transferable Veterans Benefits:  Current U.S. Military Members and Veterans: The Post-9/11 GI Bill included provision to permit a veteran to transfer benefits to a dependent, such as spouse or children. This is only in regards to those benefits unused by the service member. If the service member transfers their unused school funds, that service member cannot go back later and ask for extra or new funds for their own use.

Veterans Assistance Programs: The simple answer here is for veterans to contact the Veterans Affairs/Administration representative for a determination as to what and how to secure educational benefits. Other veterans’ agencies that can help with guidance on benefits include: the American Legion, Veterans of Foreign Wars, and the Disabled American Veterans organizations.

Public Service: If you already have student loan debts, there are loan forgiveness programs available for many public service employees that you might qualify for if you are a police officer, fire fighter, teacher, public office employee (public defender’s office, public health worker, and more). Volunteer organizations like the Peace Corp have partial loan forgiveness programs.

State and Local Programs: Check with your State government for local benefits available to residence. Tennessee, for example, currently has a State Tuition Assistance Program for student residence who graduate from high school. This funding helps cover the first two years of college in a State supported community college or trade school.

College DegreeCredit: cory stophlet, 2014

Work a job while you attend college: It might not be the preferential option, but for many students it is the only way to pay for classes without taking out student loans. Don’t feel bad if you have to take fewer courses and stretch out the time you need to complete that degree. You are not alone; many students have to adjust their schedules to balance work with school in order to have the funds earned and available to cover the following quarter or semester fees.

Final Word

Don’t put off your debt. If you have to take out a loan, make paying it off a part of your college/university experience. You really don’t want to have to start off your life after graduation owing money to anyone. There is no guarantee that you will get a job upon graduation, nor is there any guarantee that you will get the high paying career you hoped for. Choose your school and major wisely with a sense of realism as to expectations and what is practical and doable.