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Is College Worth the Cost?

by on June 13, 2012

By Samantha Savory

The cost of attending college, whether it’s public, private, nonprofit, for-profit, Ivy League or a community college, has continued to rise. To make things more challenging, federal Pell grants and scholarships have continued to decrease.  Just a few months ago, the Federal Reserve Bank of New York and the U.S. Department of Education reported total U.S. student loan debt is over $1 trillion, surpassing revolving credit card debt. These scary figures are leading many young adults to wonder if college is really worth the cost? Are students really getting the skills and knowledge they need to go on to pursue a meaningful and prosperous career? Will a degree get you a well-paying job and allow you to establish financial independence if you’re buried in debt? How will you financially survive as an adult if you are making $500+ monthly student loan debt payments for the next 25 years of your life?

Since 2001, tuition fees at four-year public colleges in the United States have risen at an annual average of 5.6 percent. A recent report from the New York Federal Reserve Bank showed that about 1 in 30 students have debt loads over $100,000. Yikes! Tackle on the increasing cost of living on top of tuition and book expenses and we get this statistic: an estimated 94 percent of college students now have some amount of debt.

These numbers are alarming but a college education in the right field does offer enormous benefits that could be well worth the time and money in the long-run.  We encourage graduating high school students and parents of young teenagers to try to explore the many avenues that can pay for college expenses. A college education can help make a significant difference when employers are looking at your resume and even shape you into a sensible critical thinker. Now, do you absolutely need a college degree to go on and be successful? According to Bill Gates and Mark Zuckerberg, no, but remember that those are extraordinary cases and you have to find what works for you. The key to making your decision about going to college is figuring out what career path you want to choose, how you are going to pay for school and if the sacrifice is worth it for your personal situation.

If you do decide that going to college is worth the investment, here are 4 tips to help you pay for college without getting into debt:

1. Work and go to school – If you don’t have a pre-paid college scholarship or savings account, go to school part-time and work full-time so you can pay as you go.  It may take a you a year or two longer to graduate, but that feeling of graduating with outrageous debt will be even more gratifying.

2. Attend a community college – Cut the overall costs of your college education by taking your first two years’ worth of pre-requisite classes at a local community college. Community colleges usually offer the same general classes for half the price and we encourage everyone to take advantage of any savings they can.

3. Invest in a 529 savings plan – This college savings plan offers great tax benefits. Not only is it offered in all 50 states and the District of Columbia, this plan lets your savings grow tax-free, and the earnings escape federal tax completely if the withdrawals are used for qualified college expenses, including tuition, fees and room and board. Two-thirds of states give residents a tax deduction or other tax breaks on their contributions. Not only are you permitted to invest in other states’ 529 plans, in most plans, your choice of school is not limited to the state your 529 plan is in.

4. Pell Grants and scholarships – The federal government provides need-based funds for young students to afford college. The federal government and state you live in offer scholarships in various categories – everything for doing outstanding community service in your local neighborhood to being a great athlete in high school.  Make sure to fill out your Free Application for Federal Student Aid (FASFA) form each educational school year in order to be considered and awarded these types of funds. Click here to learn more.

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