This fall, an estimated 20.2 million students are attending American colleges and universities. Whether at two- or four-year institutions, the first step to fulfilling the American Dream is earning a degree that will provide a foot in the door to an amazing career, higher earnings and social capital. But year after year, that dream seems more out of reach for the 40 million students who collectively owe more than $1.2 trillion in student loan debt. While 75 percent of Americans think that a college education has become too expensive for most people, millions of students will apply over the next few months in hopes of joining next year's academic ranks.
We often hear about how the government, loan agencies and institutions need to change their policies in order to make higher education more affordable, and many of these entities are taking steps to help us along. For example, the Obama administration has revamped a website that keeps track of schools' accreditation and created the hotly debated College Scorecard so that prospective students have easier access to outcomes data to inform their college choice. Beginning next year, Howard University will cover half of the cost of students' final semester if they graduate early or on time. These initiatives are important steps, but they are neither universally applicable across all institutions, nor do they have the potential to relieve financial burdens today.
We realize that borrowing a manageable amount for higher education is one of the best investments students can make in their futures, as long as they successfully complete their degrees in a timely manner. However, fewer than half of students pursuing a higher education degree in the United States will actually complete their programs on time. So, what can be done? While there are some things out of the student's control -- rising tuition, interest rates, etc. -- students and their families can take steps to pursue the education they need and want without going into crippling debt, namely by taking on a business mindset. Here are some options that can put that mindset into practice and ensure a financially secure future:
Get In, Then Take a Gap Year
Taking a gap year before college allows people to explore their interests while working, traveling or taking an internship. Open online courses give students the flexibility to learn on their own schedule without breaking the bank. Volunteering also presents invaluable opportunities to help individuals or organizations that you feel aligned with personally and professionally. While this approach is not for everyone, one way to way to hedge your bets is to first gain admission during the traditional senior year of high school, and then elect to take a gap year upon admission. Your gap year should be strategically planned to set you up for success. That, and you will need to have approval from your future institution.
2+2
Many undergraduate students get into trouble when they don't know what they want to study, entering an expensive program that consists mostly of general education requirements for the first couple of years. Students could consider completing their associate's degree at a community college as a stepping stone to a four year university, where they can focus on a major they know they want to take. On average, students can save upwards of $55,000 plus by transferring from a community college to a four-year institution.
Shop Around
It's crucial that students and their families know what to look for when deciding on one of the biggest investments of their lives. All institutions are mandated by the government to include a net-price calculator on their website, which helps families determine how much money they would owe based on past financial awards at the school. Knowing what you're getting into, and what your debt might be at dream school A versus dream school B could make all the difference for a debt-free future.
Commitment to Tech
In higher education, technology will emerge as an elevator for institutions and students alike. Institutions are becoming more efficient because of technology tools and students are taking the courses that matter most. Be sure to research whether the school you are considering has a commitment to technology -- from the admissions office to your advisor's software -- will you have access to the tools you need, when you need them, to be successful?
Stay Local + Live at Home
While it may seem counterintuitive, in most other countries and cultures children live with their parents while they pursue a college degree and well after. In America, we push our kids out at 18 and send them away to college, but many people at this age do not yet have the emotional maturity or financial means to be stable. And parents end up taking on more debt just so their kids can go to college, instead of using the money for a master's degree, for instance. Students should first pick a school in their own state -- which drastically lowers tuition -- and even consider living at home for the first year as the student gets more situated with life.
These are some under-the-radar options that students and families may be overlooking. Students and their families have a big role in taking control of what and how they spend on higher education. Yes, there is still much to be done on the part of the government and institutions to decrease the existing astronomical student debt number. That said, a big piece of that is to do everything students can do in their power to make smarter investments, be well-educated consumers and achieve their higher education goals.