SPRINGFIELD, Mo. – College students should be concentrating on passing their classes, but steep tuition hikes are forcing them to focus on their finances.
Local financial professional J. Barry Watts from Wealthcare Corporation discusses the rising cost of education and how students can pay for their four-year degrees.
Q: HOW EXPENSIVE IS COLLEGE?
- It’s become incredibly expensive; to put it into perspective, we’ve reached the point where you could buy a Porsche for the average price of a four-year degree.
- The average college student who goes to a public university will spend $26,000 per year.
- That means they’ll spend over $100,000 in just four years.
- Plus, only 45% of college students graduate in four years; the rest take five, six or even more years to complete their degrees.
Q: HOW CAN STUDENTS AFFORD THE RISING COST OF TUITION?
Consider College Alternatives
- Many great careers don’t require a full four-year degree. An associate’s degree or a technical school might be a good way to prepare for a high-earning career with much less student debt.
- Even if you need a Bachelor’s for the career you want, consider attending a community college for the first couple of years.
- They are local and often less expensive than universities far from home.
- In Missouri, community college could cost you nothing if you meet eligibility requirements, meaning you’ll spend less on your Bachelor’s when you transfer credits from the community college.
- Student loans are popular ways to pay for college, but you also will have to pay every penny back with interest.
- However, grants are free money. You don’t have to pay them back.
- Most students qualify for at least some grants. Check out wealthcarecorp.com, for resources to find and apply for them.
- Grants are usually awarded based on financial need, while scholarships are given out based on achievements, areas of study and extracurricular activities.
- There are billions of dollars in scholarships available for everything from having a high GPA to being a vegetarian. (There’s even one that gives $1,000 to Star Trek fans!)
- In addition to applying for scholarships, Watts recommends every student fill out a FAFSA (Free Application for Federal Student Aid) form to see if they qualify for financial aid.
- How much aid you can get is based on your family’s income and assets.
- If your circumstances change after submitting your application, let your college or university know. You could be eligible for more financial aid options.
- If you still need help paying for college after receiving grants and scholarships, consider applying for a student loan.
- The two main types of student loans are federal and private.
- Federal loans often don’t require a credit check and have more generous repayment options than private loans, but there are limits to how much you can borrow based on your parent’s income and assets.
- Private loans work more like traditional loans; your parents making too much money won’t disqualify you.
- Watts recommends taking federal loans first, then supplementing with private loans if you need to.
- Financial aid award letters sometimes mix the list of grants and loans universities are offering you. Separate the grants and scholarships from the loans.
Q: WHAT CAN PARENTS DO TO HELP?
- Be sure to talk with your child about applying for grants and scholarships. It’s also important to explain the responsibility of a student loan.
- If you choose to help financially, parents can get federal loans to pay for their child’s college expenses.
- Remember to take your finances into account as well; many people find themselves paying off student loans after they’ve retired because they helped a family member.
- Find out how much your student plans to spend on expenses like books, housing and transportation. Help them make a budget to avoid overspending.
- Financial planning is not static. So much can change from year to year. Find a financial professional to help guide you with your needs.