College 101
New Ways to Finance Your College Education...Without Selling Your Soul
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Figuring out how to pay for college can be stressful, and it can end up putting you in an awkward position if you don't plan carefully. It's kind of like a middle school dance in that way. Lucky for you, we've got the skinny on college finance. We don't like to brag, but we're basically the rock stars of saving you money, now and in the future.
The golden rule of paying for college is to avoid predatory private loans as much as possible. Repayment options, deferments, and loan forgiveness are harder to come by with private loans. So they’re really hard to pay back after you graduate and the amount you owe these lenders tends to explode quickly, all over your early-thirties dreams of housing ownership. (Womp womp.)
Despite these facts, private loan usage is increasing. So why in this wacky world are so many borrowers who are eligible for federal loans running to private lenders (source)?
Pro tip: max out your federal loans before seeking private ones. It's better for your skin, too.
We hear you in the back shouting, "But wait, aren't the interest rates for federal loans increasing, too?" That is correct, our well-informed friend. Federal loan interest rates recently jumped (source). That means you’ve now got even more reasons to develop creative ways of paying for school without having to hypnotize a loan officer.
We'll note that more and more schools are willing to help low-income students these days by drastically reducing tuition prices...or forgiving them altogether. This list includes elite schools like Harvard, Yale, and MIT (source). Smaller colleges like New York's Cooper Union and Berea College in Kentucky don't charge tuition, either. Admission is understandably tougher at all of these schools, but their willingness to work with low-income students is a great sign that business as usual is changing in the college landscape.
Now, if only they could offer a take-out allowance.
Meanwhile, if you don't mind holding down a steady gig through school, there are a number of employers who will offer tuition aid or reimbursement. The list includes AT&T, UPS, Bank of America, and Proctor & Gamble (source). Even if your company doesn't explicitly offer tuition assistance, it might be possible to get them to agree to it. And "they" say that corporations are out of touch.
Even the most dedicated number-cruncher might come into financial trouble at some point during college, and will therefore have to take on loan debt. Sigh. Sound planning will help to lessen the worst of that strain.
So what's the bottom line?
- Keep an eye on interest rates.
- Avoid private loans whenever possible.
- Consider schools and jobs that will offer comprehensive aid.
A little diligence and some foresight will keep your loan debt nice and manageable, unlike our latest hairstyle.