Wednesday, July 30, 2014

The Myth of the Debt Free Degree

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For this week’s post, I would like to introduce a first-time guest contributor Celest Horton, founder of How To Pay For College HQ.  Celest earned her college degree without taking on any student debt, and today she will share some of her secrets with you!

Student loan debt in the US is getting out of control.  Recent news reports have stated that the National Student Loan Debt is currently $1.1 Trillion and it continues to climb, translating into an average student loan debt per graduating student of $26,600.  With low starting salaries right out of college, it is often difficult for recent graduates to keep up with their student loan payments while also covering their basic day-to-day living expenses, which often results in new college graduates being forced to move back in with their parents to help make their ends meet without going further into debt.
The biggest problem attributing to this crisis is that most people just default to student loans to finance college not realizing that there is hope and options.  I am here to tell you that it is possible to pay for college without loans and I support a community at How to Pay for College HQ who are eager to learn how for themselves.  I was able to do it myself so I KNOW it is possible.  It takes some time, planning and positioning, but it can be done.
Here are 3 basic steps to get started towards that very goal: 

1. Dual Purpose Time in High School:
Research ways and encourage your student to take college classes or earn college credit while still in High School.

  • There is Dual and Concurrent Enrollment that allows students to earn High School and College credit simultaneously.
  • Early Enrollment allows students to take college courses independent of High School classes.
  • AP Courses (and passing the ensuing exam) also allows a way to earn College Credit while in High School at a fraction of the cost.

Now for Dual Enrollment and Early Enrollment there are fees to pay for the college credits, but they are at the Community College cost schedule and that is over an 82% cost savings over University classes – two classes (3 hours each for 6 total credits) can be taken for under $500 total.  Working a part time job, the student can help contribute to the tuition and will be far along toward the goal of earning their degree without loans!
Added Advantages:
  • You could earn an Associate's degree before graduating High School, which usually requires 60 to 64 credit hours, depending upon the state’s mandate for the course of study.
  • Eliminates duplication of coursework those first few years of college.
  • Potential to finish a Bachelor’s Degree in less than four years and ultimately save thousands of dollars on tuition.    
2. College Choice 
When it comes time to pick a college it is important to pick one that is financially smart.  Many people falsely believe that the school of choice will have a direct correlation to the success that their student will achieve in life and their overall lifetime earning potential.  The reality is that it really doesn’t matter from where the degree is earned.  The success of any individual is based upon their drive, ability to network and willingness to continually learn and grow. 
It is important when looking into colleges that the list be narrowed down to ones that can be paid for by the parents and student working together as a team.  By utilizing savings, grants, scholarships, and college Merit Aid a student should be able to attend a financially smart school choice without the use of loans. 

3. Actively Search Funding
Complete the FAFSA (Free Application for Student Federal Aid), no matter what your family’s income status.  The first FAFSA should be completed the Base Year, which starts the January of the junior year in high school.  The FAFSA will need to be completed each year while your student is in college, leading to more opportunities until graduation for State or Federal funding as family circumstances can change.  One important circumstance that could change is having more than one child in college at the same time.  The Expected Family Contribution (EFC) will suddenly be divided by how many siblings are in college, leading to many more opportunities for need based help.  I myself will have three kids in college at once and it’s reassuring to know that in that situation there will be hope for HELP.
Make sure to complete the FAFSA every year!   There are federal grants available and we don’t want to leave any money on the table.   Every dollar counts!
Focus on preparing for Standardized Tests (ACT or SAT) while maintaining good grades (High GPA & Class Rank) in school, all of which can be helpful when trying to be awarded Merit Aid from a college.  Merit Aid is money that a college has set aside to attract students that will make them look better for statistical purposes.  If there is something that a particular college likes about your student they will offer them Merit Aid to try and convince them to attend.  It is another form of free money that doesn’t need to be repaid and, for a good student, there is often a lot of potential for Merit Money because it is not based on need and only achievement.
Start looking for local scholarships where the entry pool is much smaller.  They may represent smaller dollar values, yet they do add up and often are renewable over four years.  Use online tools & books to help you find additional scholarships. Be mindful that there are some scams out there trying to get you to pay money for scholarship links. A few trusted and recommended sites to start your search are FastWeb and College Board’s Scholarship Search.   Mark your calendar with the application's deadlines and make sure that you are a good fit for the scholarship requirements.
Students and parents can often lose sleep over the concerns of how to pay for college.  As a society, our main goal should be to help position new college graduates to start their professional careers on a solid footing and without the weight of student loan debt.
Can you think of any other suggestions that would help a High School student reach their goal to pay for college without loans?  I would love you hear your thoughts and feedback.

Celest Horton is the founder of How to Pay for College HQ, which offers weekly podcasts posted every Wednesday as well as helpful hints regarding FASFA and many other resources.  Celest graduated from college debt free and is making great strides to help her four children and other students across the country do the same.  Follow Celest on Twitter at @celesthorton.

You can check out my guest podcast with Celest HERE.

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