The new financial crisis
The statistics on college debt are staggering: 40 million Americans have student debt, owing a total of $1.2 trillion dollars. The cost of going to school has risen 4 1/2 time MORE than the rate of inflation. College debt as a percentage of personal debt has tripled in the last ten years. Gone are the days when you could work your way through school. 1985 was the last year that a student could work part-time (plus full-time during the summer) at minimum wage and be able to pay for college.
Is school debt a good investment?
Rising tuition costs, a shrinking job market and wages that are not keeping pace means that a college degree may not be the good investment it once was.
This is the reason we’ve counseled our kids to not go into debt to go to college. The idea of decades of crushing debt and possible bankruptcy just isn’t worth it. But that doesn’t mean that they’ll be working at McDonalds all their lives. There are many high-paying jobs that don’t require a college education. It may take a little creativity and ingenuity, but there are plenty of rewarding (and lucrative) jobs that do not require a college degree.
But if your child has his heart set on a college degree, there are still ways to graduate with a BA/BS that doesn’t cost an arm and a leg. Let’s start with scholarships. Every year thousands of scholarships go unused. Many of these are small scholarships, offering between $500-$1000. But a handful of small scholarships can add up to some real income. Find out the facts on scholarships here and start applying.
Your student can cut college costs by taking Advanced Placement (AP) classes in high school which then translate into college credit. The College Board has lots of resources and information on how to get ahead with AP classes.
What if your student missed the AP classes in high school or his/her school didn’t offer them? Not to worry. There are literally thousands of online courses you can take from universities. These aren’t fly-by-night, worthless-degree scams. These are honest-to-goodness college classes, taught by college professors at well-known universities. Harvard, MIT, Cornell and Berkley are just a few of the universities in the EdX system. The Coursera.org network collaborates with universities from around the world: University of London, University of Tokyo, as well as CalTech, Stanford, Princeton and our very own University of Minnesota. This is just the beginning of online college courses. A Google search will reveal dozens of universities that aren’t part of these two big networks and offer online courses.
Most of these classes are free. Yes–FREE. Some may charge a $40-50 fee if you want a certificate. But you don’t need the certificate. Just take the course and then test out of it with CLEP or ACE tests (just like you do for AP classes) for college credit. Each CLEP/ACE test costs between $50-75, so your student can get 1-2 years-worth of college credit for just a few hundred dollars.
Make a plan
Now don’t just start taking online classes willy nilly. You’ll want to check first with the college your student hopes to graduate from to see what CLEP/ACE tests they’ll accept for college credit and what the limit is. But with careful planning, your student can cut her/his college expenses dramatically. If s/he starts her/his college career with a dozen online college courses, works full-time during the summers then combines that with a few $500-$1000 scholarships and voilá! You have a BA or BS with no debt!
Graduating without the messy burden of huge student loans? I can hardly think of a better way to get a good start in life.