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Jul   2012

Mon

09

Help Students Minimize Student Loan Debt

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Tags: counselor advice, college counselors, student loans, scholarships, grants, financial aid, college costs

by
Senior Assistant Editor, Wintergreen Orchard House

When I'm not busy blogging, I spend my time as an editor for Wintergreen Orchard House, gathering and organizing data from colleges and universities in the Northeast. For the past few months, my fellow editors and I have been knee-deep in all sorts of interesting tidbits of collegiate information. While things like enrollment figures and application deadlines don't exactly tantalize the imagination, I do love discovering schools' notable alumni and quirky mascots, and I get a kick out of cleverly named a cappella groups, such as the Shirley Tempos at Brandeis University (some of the best ones are too tongue-in-cheek to even mention here!).

There's always one bit of information, however, that stands out to me more than anything: the inevitable rise in tuition at schools both public and private, year after year. While some schools' tuition rates have risen almost imperceptibly this year, others have increased by several thousand dollars. Some of your students may perceive these ever-ballooning price tags as roadblocks to a college education. But they don't have to be.

In a recent interview with NPR, Kevin Carey, Director of the Education Policy Program at the New America Foundation, tackled the issues of increasing tuition and the attendant student debt burden.

Carey notes that college tuition has been rising faster than both inflation and incomes, to the extent that a college education is now four times more expensive than it was 20 or 30 years ago.

"The reality is that as college tuition has consistently outpaced the ability of people to pay out of pocket, debt has been the safety valve of our higher education system," said Carey in the interview. "It is what has allowed everything to keep running because people know they have to go to collegethey don't feel they have any choice—so they just continue to borrow and borrow and borrow."

With the total outstanding student loan debt in the United States hovering around (go ahead, hold your pinky to your mouth and say it like Dr. Evil!) $1 trillion, taking out loans seems all but unavoidable, particularly for middle class and economically disadvantaged students. So how can you help your students avoid falling down this rabbit hole of student debt without forfeiting a college education altogether?

Student Loan DebtEducate them about student loans. Make sure your students are familiar with the different types of student loans and their long-term effects. It's easy to sign a few papers and take the money when repayment is at least four years away, but those four years will go by quickly. Help them understand the interest rates of both federal and private loans and how much that interest will cost them over the life of a given loan.

Help them search for scholarships and grants. Obviously, the more money your students can get for free, the better. Researching and applying for scholarships takes some time and effort, but it will be more than worth it in the long run. Sites like CollegeXpress make it easier by helping sutdents hone in on the scholarships for which they might be eligible. Be sure they're also looking at the institutional scholarships and grants available at the schools to which they're applying. Some schools offer scholarships for things like above average SAT scores—they just need to be sure to check with financial aid offices so they know what's available and how they can cash in.

Offer money-saving (and money-making) suggestions. Whether a student is going to a local state school or an Ivy League university, a college education is one of the biggest-ticket purchases he or she will ever make. Help your students find ways to scrimp and save whenever possible.

After the excitement of turning 18 and graduating from high school, living at home might seem like a freedom-crushing option, but students who live within a reasonable driving distance of their schools might consider doing so. Room and board can add thousands, if not tens of thousands, of dollars to the total cost of attendance, so toughing it out with Mom and Dad for a little while can translate into a huge savings.

Many freshmen are also hit with sticker shock when it comes time to buy textbooks. Advise them to hunt for used textbooks at campus bookstores or online before shelling out hundreds of dollars for brand new copies. Bonus: sometimes the previous owner will have left behind some handy notes and highlighting!

You might also advise your students to look into work-study options or part-time jobs to help pay for tuition and cost of living expenses. Just be sure they're familiar with their schools' policies, since some colleges prohibit freshmen from working during their first year.

"More bang for your buck" options. Help your students investigate money-saving options at the schools they plan to attend. Some schools offer flat-rate tuition, meaning that once students have registered for enough hours to be considered "full-time," they can take as many hours as they want for a single, flat rate (though they may need departmental permission to take a particularly large course load). This option can both reduce the overall cost of a college degree and encourage students to graduate on time.

Other schools offer guaranteed tuition plans, under which students will pay the same tuition rate they pay as freshmen for all four years. Guaranteed tuition helps families plan in advance for tuition costs and also encourages students to graduate on time, since the rate is generally effective for a maximum of four years. As you help your students narrow down the list of schools to which they will apply, consider suggesting colleges that offer these or similar options.

Think about the future. Even though your students are still teenagers, the decisions they're making today will affect the rest of their lives. Is it really a good idea to take out massive student loans to major in folklore and minor in yoga at a small, expensive liberal arts school? Maybe . . . but probably not. Encourage your students to think beyond college. Ask them, "What do you want to major in, what kind of job are you hoping to land, and will that job allow you to comfortably repay the debt you'd need to take on to get that degree?" Of course, there always have been and always will be dreamy-eyed liberal arts majors, such as myself. But one simply can't graduate from college and immediately become the next Ernest Hemingway. Before taking on loans, all students, regardless of their majors, should have a realistic idea of what they want to do with their degrees and what kind of financial future they're working toward.

What's your advice for helping students avoid student loan debt? Let us know in the comments!

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