By Mitchell D. Weiss
Suppose for a moment that the student loan crisis is painstakingly addressed the way it should, the ideological debate about interest rates -- subsidized or not -- is exposed as the sham it is, and folks everywhere gain a better understanding of why the private student lenders continue to earn outsized returns relative to the risks they run. We'd still be left with college costs that keep going up, a dropout rate that hovers around 50% and graduates who are unable to find jobs that pay enough to cover the bills.
The fundamental business model for higher education is a melting ice cube as fewer and fewer families are able to afford the increasingly expensive product this country's colleges and universities continue to pitch. And while the schools are slowly waking to this unpleasant reality and beginning to make the necessary changes for their own survival, the evolution to a better state continues to be slow and fitful.
Parents and students often ask me about ways to maximize financial aid or how to borrow money more cost-effectively, when they should instead be asking about comprehensive strategies to cut their overall college costs.
For example, I was able to test out of 12 non-core credits thanks to the College Level Examination Program. I also pushed the boundaries and took as many credits as I could each semester. The combination of the two helped me to finish a year ahead of time, which, when you're paying your own way through night school, was a pretty big deal.
My son was equally ambitious about testing or comping out of his own core-course requirements when he was pursing his two grad degrees while working a full time job.
My daughter's approach will be a variation on the theme. She's currently applying to graduate schools and, as it turns out, there's only one university locally that offers the program she needs. Unfortunately, it requires a two-year full-time commitment and the cost is $90,000 -- for a degree that will likely translate into a job that pays $35,000 per year. (Don't laugh, it's social work.) So she decided to explore her online alternatives and discovered several equally fine programs offered by nationally recognized public and private institutions. Moreover, because these are online programs, she'll be able to do her coursework without sacrificing the career she's worked hard to develop these past few years. As important, the cost will end up at just under $25,000.
The point is, parents and students have several options that are worth serious consideration when it comes to managing the cost of higher education. Some may require more effort and flexibility than others, but the following six strategies have the potential to save a year or more of the cost of a college education today:
As parents and students become better at finding, pricing and negotiating more cost-effective higher education alternatives, the schools will have no choice but to reconstitute their failing business models if they hope to compete for a piece of that other melting ice cube -- the shrinking pool of tuition dollars that consumers are willing to pay.
This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates. It originally appeared on Credit.com. Mitchell D. Weiss is a contributor to Credit.com, experienced financial services industry executive, entrepreneur and adjunct professor of finance at the University of Hartford. He is also the author of the recently published College Happens: A Practical Handbook for Parents and Students and Life Happens: A Practical Guide to Personal Finance from College to Career-2nd Edition.
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Also, scheduling 18 credits in one term is a recipe for disaster. Education is not a race to a finish-line. Over-loading with a bunch of classes leaves no room to grow, thus defeating the purpose of going to school in the first place.
If money is the issue and you don't wish to take on large loans, the best choice is to slow down-- not speed up. Attend school part-time while working part-time. Some employers will even kick in some bucks toward classes.
Another option is employment through a college. School employees and their families often get free or reduced tuition.
Not mentioned in this poorly prepared article is the fact that many quality institutions will allow parents to pay today -- for schooling down the road. So, if the family is willing to commit up front, they can lock in and freeze (at least most of) the college bills at current rates.
School choice matters in schooling. Time and cost are relative factors.
I'm not talking about seeking a "top-school name," but rather the top choice to reach a student's particular goals. If you want to study theater, go to a place with a solid theater department.
Regardless of how employers hire -- you're not saving time or money at a cheap but inappropriate school.
You will find no better job faster or sooner in a bad economy graduating this year instead of next year. If an education were meat, you're no better off eating hamburger quickly. Chew your steak slowly, savor the expensive meal...unless you happen to strike it rich after a decade's experience out there in job land, you'll be eating turkey dogs the rest of your life.
Take five years to finish your degree. Carry the minimum number of credit hours. Give yourself your best chance for actually absorbing material, enjoying your social life and performing well under less pressure.
It isn't a race. There is no gold medal for the swiftest. And, above all, college is NOT a job training ground, a Bachelor's degree is NOT a ticket to ride the white collar gravy train.
Three, four or five years--it's all an amount of debt. Your monthly note is all the same. You'll be paying back more or longer--so what? That happens every time we purchase the Mercedes over the Ford, the house to grow into over the shack for now.
Education is both an investment in your future and the absolute richest of 'now' experiences. Give yourself time to mature. Integrate fully into the academic community--more opportunities come along over five years than three.