The cost of higher education has skyrocketed over the past few decades making it feel like a college degree is out of reach. But with the right strategy, it is possible to afford college without taking on a tremendous amount of debt.
- Start Early
You want to start saving as early as possible for college (just like you do for retirement) to give that money time to grow. If you started with a $1,000 investment and contributed just $100 a month for 15 years at a fixed annual rate of return of 5%, you would have over $28,000 saved by year 15. To figure out how much money you will need to save for college meet with your money mentor to set up a savings goal on your account. Remember, this is a hypothetical example and individual results will vary.
- Choose Wisely
It may no longer be feasible to attend the most prestigious college that you or your child is accepted into. Public colleges are less expensive than most private colleges, particularly if you are a resident of the state where the public college is located because state residents usually pay reduced tuition. Attending a community college for the first two years (while taking prerequisite classes) will not only reduce educational expenses but can also reduce living expenses if they live at home to avoid paying for room and board. Once your child is ready to get into the core classes, they can transfer to a more prestigious college. This ensures they will still get the degree from this university, minus the fancy price tag.
There are many scholarships that go unrewarded because people don’t apply for them. While it makes sense to apply for big name (and big money) scholarships, every dollar counts when it comes to paying for college. Look closer to home, in your town, your area, and your state for scholarships that you are eligible for and apply for those too. Fewer people may apply for these small, regional scholarships which could mean less competition for you! In addition, many are under the impression that all scholarships are based on academics – they aren’t. Most do not graduate high school with a 4.0-grade point average. The good news is there are scholarships available for those who are not straight-A students. A great place to start is with your hobbies. There are scholarships available for everything from puppeteering to cartooning!
- Take Your Time
There is no rule saying that only freshly minted high school graduates can attend college. There is nothing wrong with waiting a year or two before starting college. You can use that time to work and save money for your education. There is also nothing wrong with attending college part-time and working part-time. Both options may mean you graduate later but that is a small price to pay to avoid a lot of student loan debt.
- Know What You’re Signing
Too many of us don’t get much financial education in school and if our parents aren’t financially savvy, we don’t get much at home either. That is why so many teenagers take out thousands of dollars in student loans without really understanding what that means – both in the short and long term. Before applying for student loans, do some research to make sure you are getting a good interest rate and that you understand the repayment terms. Also, have an idea of how much you will need to borrow. Don’t take out a loan for an amount way over and above what you estimate you will need to pay for college expenses.
Is College Even Worth It?
Overall, there are many financial benefits to going to college. The typical college graduate earns an estimated $650,000 more than the typical high school graduate over the course of a 40-year work life. It is clear that college graduates’ earning potential is statistically increased. Just be sure you make a plan that will both get you that degree and keep you out of debt.
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