The rising cost of college tuition continues to result in individuals taking out a record amount of student loans. As a result, student loans continue to be a major barrier for young families. Student loans are playing a roll in millennials delaying major life events such as purchasing a home or having children.
College tuition continues to rise faster than wages and inflation which is a trend that can’t be sustainable long-term. Total student loan debt is more than 1.48 trillion and the average graduate leaves school with nearly $40,000 in student loans.
With all that being said, most college graduates will be better off in the end. The average salary of a college graduate is significantly higher than a non-graduate on average. In fact, a recent study by Georgetown University shows that college graduates earn $1 million more than individuals with a high school education. So how do we balance the benefits of college with the downsides of student loans?
$50,000 in Student Loans
In 2012 my wife graduated with her teaching certificate and had accumulated nearly $50,000 in student loans. She originally graduated with her bachelors degree in communications with about $25,000 in student loan debt. After working at an advertising agency for a few years she realized that her passion was teaching. Going back to school added another $25,000 in student loans.
Even though $50,000 in student loans is a lot, it could have been much more. My wife went to community college for two years, attended an in-state four year university, and had a few small scholarships. While there were mistakes made along the way, such as the one semester she spent at an expensive private school, overall this approach kept her student loans from being significantly higher after graduating. In the end, my wife loves being a teacher. It gives her purpose and is her calling. It’s difficult to put a price tag on that.
Graduating College Debt Free
My path through college included four different schools; two community colleges and two four year state schools. Through my undergrad journey, my college was paid through a mix of athletic and academic scholarships.
Instead of having my mind set on an out of state private or big name university, I followed the opportunities that were presented. I didn’t end up at my dream school(s), but in the end I don’t think that mattered much. College is what you make of it, and you can have a great experience at nearly any school with the right attitude. I don’t feel like I missed out on anything by attending community college and then state schools that would pay for my tuition.
The end result was six and a half years of college while barely paying a dime of tuition. In graduate school I found a school with a great internship program. The 20 hour per week internship paid for my tuition along with $800 per month. Combined with my weekend server/bartender job I was able to fully support myself through grad school.
Three Ways to Reduce the Cost of College
Below are three suggestions to reduce the cost of college. These may seem like common sense suggestions, but it amazes me how few people decide to do them. I know the cost of college continues to increase but if you have some flexibility and drive you can still attend college at a reasonable cost.
1) Consider Going to Community College
Here’s a little secret: Nobody cares if you went to a community college after you graduate from a four year university. The four year school you graduated from is all that needs to go on your resume.
I know community college isn’t the full college experience. However, community college allows a much cheaper option for your first two years of college. Community colleges are not available in every state, though there are other states where community colleges are completely free.
The average annual cost of tuition and fees for a public 2-year college is $3,440 for in-district students. However, according to the same source, the average annual cost for a public 4-year university is $9,410 for in-state students and $23,890 for out-of-state students. For a private 4-year university, you can expect to cough up $32,410 per year in tuition and fees. The differences are crazy, aren’t they?!
2) Consider an In-State or Lower Cost University
The name of the school on your diploma really doesn’t matter. It may help you to get your first job. However, after a few years a history of achieving results, the ability to build effective relationships, and your professional network will help you advance. I’m sure there are exceptions in specialized careers or if you aspire to be a CEO. Yet, for most of us average folks, the name of the school you went to doesn’t make a difference.
It blows me away when students pay out-of-state tuition to attend a similar state school across the country. If you can afford the increased tuition, then go to whatever school you want. However, attending your “dream” school will turn into more of a nightmare if you graduate with six figure debt.
I graduated from one of the lowest ranked schools in my state. I’ve never found this to be a barrier in my career growth. If fact, graduating college debt free provided more flexibility than if I had tens of thousands of dollars in student loans.
3) Look for Scholarships
You may not be able to get the scholarship or grant you want at your top school. However, I’m willing to bet you can find a decent scholarship or grant somewhere. There are billions of dollars in federal grants left on the table every year.
It will take work to get a scholarship or grant, but the payoff can be huge. I ended up getting a 5th year scholarship as I needed to go an extra semester to complete my undergraduate degree. I was one of the only student athletes to apply for the scholarship and ended up getting it mostly due to a lack of competition. There were dozens of other students who could have benefited from the scholarship but they either didn’t proactively seek it out or didn’t put the work in to complete the application. A few hours of work saved thousands of dollars.
My wife also received a scholarship because her Aunt wrote a letter to the Dean at her four year school sharing a story of past medical issues. That one simple letter saved her thousands in tuition. The moral of the story is to keep an eye out for scholarships that fly under the radar.
Final Thoughts on Student Loans
Too many recent graduates are leaving school buried in student loan debt. The cost of college continues to grow at an unsustainable rate. However, I believe that attending college can be reasonable to most families. Going the community college route, avoiding expensive schools, and finding scholarships can make a huge difference.
The data show a college degree is usually well worth the investment, even with student loans. However, leaving college with less debt gives a recent graduate a huge advantage. Avoiding student loans all together may not be possible. However, there is a huge difference in graduating with $25,000 in loans and $125,0000. Hopefully these suggestions will help you or your future college-bound child to keep down the cost of college.