One of the quandaries of figuring out how to pay for college is that by the time you’ve figured out how heavy a debt load you’re likely to find yourself crushed underneath, it’s too late to do anything about it. (Colleges don’t offer advanced degrees in financing your education — and if they did, you’d only end up having to figure out how to pay for those, too.) There are some things that college-bound high school seniors and already matriculated college students can do to help avoid the worst pitfalls, though; we asked a pair of college-finance experts for their tips.
Check the Scorecard
In 2015, President Obama introduced College Scorecards on the federal Department of Education website, which provide a wealth of data on graduation rates, average earnings after graduation — and student debt load. “At some schools in the country, students are virtually guaranteed to leave school with debt, and a lot of it,” says Debbie Cochrane, vice president of the Institute for College Access and Success in California. “Whereas at others, they may be able to graduate debt-free, or with an amount of debt that’s manageable. So look carefully into the schools you’re choosing, to make sure yours is not one that’s likely to leave you with debt you can’t repay.”
Read the Loan Fine Print
Once you choose a college, scrutinize loan offers carefully, says Cochrane, not just for their interest rates, but for what protections they have in case you have trouble repaying them. “Not all debt is the same,” she says, noting that private loans are particularly suspect but that even some public loans can come with snags: “New Jersey has a state loan program where students are encouraged to take out a form of life insurance, because their debts will not be discharged if they die. It’s horrendous. Students need to understand those differences, and proceed incredibly cautiously if the school is encouraging them to take out private loans.”
Use Income-Driven Repayment
If you hit hard times after graduation, head immediately to the DOE to enroll in an income-driven repayment plan, which caps your monthly loan payments at between 10 and 20 percent of your discretionary income, after necessities. (Note: Only federal student loans are eligible for this repayment form, another reason to think carefully before deciding what loans to take out.) “The number of borrowers in these plans has grown in recent years, which is a good thing,” says Cochrane. “No student should be forced into the poorhouse, or to go hungry or homeless, because of their student loans.”
Pricier Isn’t Always Better
There are nearly five thousand degree-granting institutions in the United States, some of which come with price tags upwards or $60,000 per year. But an expensive school does not always a better school make, something you should consider carefully when choosing a college. “The quality of most colleges is great, so in going to a less expensive school you’re not really going to sacrifice quality,” says Mark Kantrowitz, publisher of the college admissions and financial aid website Cappex. He notes that you can find professors educated at the top schools at all kinds of campuses: “The Ivy League graduates more Ph.D.’s than they hire as faculty. They have to go somewhere to teach.”
Seek Out Scholarships
Pursue college aid via every avenue you can find, beginning with what Kantrowitz calls “gift aid” — money you won’t have to pay back. In addition to government free-tuition programs such as those offered for community colleges in Tennessee and Kalamazoo, Michigan, look for scholarships offered not just from your university, but also from community organizations or special-interest groups in your hometown that cater to your personal identity or talents.
Consider Transferring Credits
While community college tuition can be much cheaper, Kantrowitz warns that students who detour through community college may never reach their final destination. “Only one-fifth of students who start at community college get a bachelor’s degree in six years,” says Kantrowitz, versus two-thirds of students who start at four-year colleges. He recommends taking core or prerequisite classes at a community college during summer session, then transferring them to a four-year school — just check in advance that the new college will accept them.