By Susan Smith Nash, Ph.D.
$50,000 per year for tuition and fees? Another $15,000 per year for a dorm room and a meal plan? The numbers are staggering, and are slated to stagger you even more in the years to come. To add insult to injury, the Congressional probe of the student loan industry is suggesting that ethically problematic relationships between colleges and lenders may exist.
Before overreacting, however, it may actually be in the students’ best interest to have a college establish a “preferred provider” relationship with a lender. As one economist has suggested, having a “preferred provider” lender may lead to economies of scale and lower costs of borrowing.* What this means is that the per-loan (and per-student) cost of doing business would decrease significantly if there is high volume. In theory, those savings would be passed on to the student, or, in order to receive the “preferred provider” designation, the college negotiates a good deal for the students.
If the hint of kickbacks and sweetheart deals were not enough to taint the student loan industry, recent questions about high-pressure tactics used by student load debt collectors** brings to light the difficulties that many individuals have in paying off debts that can easily top $100,000.
Needless to say, the best situation is to not have a student loan at all. But, is it feasible to have the goal of obtaining a college education without getting into debt?
With careful planning, good grades, and tenacity, it is definitely possible to find ways to pay for college without entering the La Brea Tar Pits of student loan debt. There are more avenues than you might think. In addition, there is a new website, “The Debt-Free College Guide,” which provides information by state on how to find ways to finance your higher education. It is located here: http://debtfree.elearners.com/how-to-pay-for-school/
Loan Forgiveness Programs. You might be surprised to learn how many loan-forgiveness programs there are out there. Generally, they require a five-year or so commitment to the entity that is paying the loan, and which needs the experts. For example, you may have the costs of your education degree paid for if you commit to teaching for five years where there is a teacher shortage. While the loan payoff scheme sounds good, it is not always clear what kind of salary the person would be paid. That would definitely be something to check into.
Military Service. Many branches of the service – not just active duty – offer education benefits that range from the Montgomery GI Bill to other types of reimbursement or savings. National Guard education benefits seem to vary from state to state, institution to institution.
Employer-Paid Tuition and Scholarships. Many employers have programs that allow employees to be reimbursed for some or all tuition costs upon successful completion of a class. Some employers even have scholarships for employees’ children who are in college.
Native American Education Benefits. For members on the rolls of the various Indian nations, there are often significant. Some tribes pay more than others, and some try to offer incentives for students to study areas of benefit to the Native American community.
Scholarships. There are numerous scholarships available in specialized areas. Many are not particularly large, but they can be a big help in defraying the cost of college. They can also help you as you find your niche in the world, or seek practical experience to supplement the theoretical.
Virtual Work-Study Programs. This is not listed within the possibilities, but the concept intrigues me. If a student is an eLearner, in theory, it would be viable to have virtual internships as well as virtual work-studies, particularly in the areas of data collection, design, marketing, and demographic analysis.
The price tag for a college education is hefty, and not likely to slim down any time soon. On top of that, with the recent scandals in the student loan industry, there may be fewer loans available. That said, it makes more sense than ever to seek debt-free approaches to college.
*http://media.www.thetriangle.org/media/storage/paper689/news/2007/04/27/EdOp/
Whos-gaming.With.Student.Loans-2885373.shtml
**http://www.reuters.com/article/domesticNews/idUSWAT00740320070427
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