Student loans have been a hot topic
in the financial news recently. With the rising costs of tuition and the prevalence of for-profit colleges, many graduates are finding themselves under a heap of debt with difficulties making their payments.
One CNBC article reported that the number of borrowers defaulting – or no longer making payments – on their loans doubled between 2003 and 2011.
Will things get better? It doesn’t look good. 40% of borrowers are expected to fall behind on their loans by 2023.
If you’re thinking about pursuing higher education, here are a few ways to help keep costs low.
Start your search in state
While university costs vary greatly by state and institution, in general, attending a college in your home state can save you thousands.
As reported in one U.S. News article, in-state tuition and fees at public universities save students more than $12,000 compared with out-of-state rates for the 2017-2018 school year.
Think public institutions first
Along with selecting an in-state university, the next biggest savings for most students will likely come from choosing a public education over a private one.
Just how much could you save? Student Loan Hero crunched some numbers.
For the 2015-2016 school year, the average tuition for public university was $9,410 for in-state students and $23,893 for out-of-state residents. Compare that with private schools and the number gets even bigger; the average private school came in at $32,405.
That means if you attend a public university in your home state instead of private college, you could save over $91,000 over the course of a four-year education.
Consider future earnings
A college education is an investment in your future, so make sure you invest wisely. Not all career paths are created equal, so before you take out several loans, take a look at how much money you should reasonably expect to earn.
If your chosen career path is a difficult one in which to get an entry-level job and your earning potential is low, then you may want to consider choosing a college with lower tuition fees.
How different can earning potentials be? Forbes reports that top average earners with a bachelor’s degree make an average of about $62,000 for their first job, while kindergarten teachers can expect to earn about $35,000.
Start at the community college level
There’s no one path to earning your degree. If money is an obstacle, consider attending a community college, earning your associate’s degree, then moving onto a four-year university.
Personal finance blog Money Crashers reports the annual cost of tuition at community colleges is about $2,000 a year. That’s a savings of over $7,000 a year!
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