According to the Motley Fool UK, the Consumer Credit Counseling Service (CCCS) has stated that unless parents are in the fortunate position to provide their children with “absolute financial support” during higher education, that students must accept debt as a fact of life. (Students Must Accept Debt, Motley Fool UK.) The rising cost of a college education contributes to this, of course, as does the necessity of a degree for the “best” career paths — those with the highest earning potential.
In general, individuals with a college education will earn more over their lifetime (though there are notable exceptions), justifying the extra expense up front. The best of both worlds is then to limit the expense where possible, and therefore the debt, and still earn that worthwhile degree.
Here are some options beyond loans for students whose parents are not in the position to provide “absolute financial support.” If these can be combined, the student will have less exposure to debt.
Get scholarships. It is possible for scholarships to pay for your entire college education, but not easy. Most scholarship programs require students to excel in a certain area, academic or extracurricular, and the chances of exceling at enough different areas is low. Some scholarships are based on your ethnicity, as well. If you’re a minory, you may be in luck. Start with the College Board’s Scholarship Search.
Find grants. Grants are the next best things to scholarships. In general, the funds are more limited, and are based mostly on need rather than academic prowress. Grants are also used to encourage students to undertake certain disciplines. For example, as teaching is often an unattractive profession — this comes and goes in phases — grants (and loan forgiveness) are occasionally offered to those studying education. Here’s a good overview of what may be available.
Attend a low-cost college. Attend a public university rather than a private university. Still, rather than a public university for four years, spend two at a community college and finish the degree at a public university. Take into account that the connections you make at college and the degree you receive, in some disciplines, may have an effect on the first job you receive out of college. That first job — if you continue your entire life on that same career path — can affect your earnings over your lifetime. (My first job was for a non-profit organization earning about $550 a week. I could have done that without a fancy bachelor’s degree from my private land-grant university.)
Take advantage of work-study programs. If you qualify, a work-study program is a way to earn income that can be used for paying college and living expenses while still earning the degree. This is my less favored option, as to make the most of the educational process, the stress of a job can be distracting from the true goal of the four years. Not all college jobs are created equal; A minimum-wage job at the university library, would not be too distracting at all, unlike a higher-paying job at the local strip club (not endorsed by the Federal Work-Study program).
Corporate sponsorship. My current company offers significant tuition reimbursement — enough to cover public university tuition in many cases — for those employees earning the bachelor’s degree. Other corporations provide the same benefits. There may be a requirement that the degree be in a field related to the company’s business or the division. For example, a financial services company may require a degree in business, accounting, finance. If you work in the company’s human resources department, you may need to earn a degree in human resources to qualify for reimbursement.
The company will pay the school in advance of each semester, so you do not have to deal with loans at all — though college aid advisors recommend getting a federal loan and using the reimbrusement to pay back the loan immediately. This ends up costing more thanks to origination fees. It also opens up the chance of not using the reimbursement to pay off the loan.
Other options. If I remember correctly, I could have gone to Princeton University for free, if I had been accepted. That benefit would be awarded to me because my mother worked there for the time I was going to college. I didn’t apply to Princeton as they surprisingly do not have a strong undergraduate music program and I probably didn’t have the GPA. (I later discovered, as an undergraduate playing in ensembles when home over the summer with Princeton graduate students, that I might have received a better education and had exposure to better peers in my chosen field than where I was.)
It’s going to take a combination of all of the above to completely avoid debt when it comes to paying for higher education. I believe it can be done, but in some cases, such as working and maintaining eligibility for scholarships, may put too much of a strain on the student.
I’d like to hear stories from anyone who has managed to graduate with a bachelor’s degree without incurring any debt. What choices did you make and were there any sacrifices? Please feel free to share.
Photo credit: jasonhe
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