A College Guidance Blog
In 2013, Forbes Magazine published a crippling announcement that college graduates in the U.S. had borrowed over $1.2 trillion in loans to finance their education. While this number seems astronomical and rather unbelievable, when you add up the dollars, it makes a lot of sense. According to The Institute for College Access and Success (TICAS), the average undergrad owes $28,400 in loans after their graduation. Couple this with likely graduate school costs -- the average MBA program costs $80,000 for tuition alone -- and the numbers add up quickly.
While many families are indeed taking out a second mortgage to finance their young person's education, many also are unaware of the amount of aid available to alternatively offset educational expenditures. The truth is that the landscape surrounding financial aid (scholarships, grants, and loans) is a mess, leaving students and families swimming in a sea of confusion rather than firmly planting their financial futures on the ground. Furthermore, according to a research study by Public Agenda published by the NYTimes, financial hardship is one of the top reasons students do not matriculate at their postsecondary institution. Wherever you are in the college process, it is never too early to start considering how to finance college, and here are some tips to guide your considerations… Community College While many high school students view community college as an underwhelming option for their postsecondary matriculation, it is often a very practical choice. Community colleges are inexpensive, offer a broad range of specialties, and often have pipeline relationships with larger institutions that all-but-guarantee admission for students who take their academics seriously. Overcoming the community college stigma may be a bit of work, but worth it when a student is considering buying a new house at 33 instead of 43. Private Scholarships The myth: My student will be able to finance their entire education through private scholarships. The truth: There are only about 250 private scholarships in the entire United States that offer the mythical full-ride. In reality, private scholarships fund less than 3% of all educational financing and often require hours of work for amounts of money that students see a pennies compared to their overall expenditures. Still, if a student is able to secure a $1,000 scholarship or an application that requires two hours worth of work, the rate of $500/hour seems like a worthwhile endeavor. Beware: Apps and Internet Search Tools While the internet does indeed provide a plentiful bounty of tools to aid in your search for scholarships and financing options, the most popular tools are often the most daunting and questionably useful. Tools like Fastweb or Scholarships.com provide vast databases of scholarship opportunities, but are challenging to navigate, leading often to dead-end options, and fill your inbox with overwhelming amounts of junk. This being said, some tools have some worth and two that I have found to be very useful are Scholly and SALT Money. Both have navigable interfaces, rich databases, and do not load your inbox with junk. Untapped Resources Of course, private and non-profit organizations provide sizable amounts of resources regarding financial aid, but one resource (ironically) often goes untapped: The Department of Education. Both the U.S. Dept. of Ed. and state Depts. of Ed. offer great pools of resources for students and families at all stages of the college process. The Pennsylvania Higher Education Assistance Association (PHEAA), for example, offers free seminars, booklets, videos, and tools for understanding aid. The U.S. Dept. of Ed. has terrific YouTube series on college finances. Also, the Free Application for Student Aid (FAFSA) is no slouch in its offerings of resources for students. Although financing college can seem like an insurmountable task, it is one that young people must be prepared for. Start early, and use the resources available to ensure that talks about the second mortgage continue to remain just talks.
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