Guest post: 6 ways students can deal with rising tuition costs

Syndicated courtesy of Hat Toss

According to the Department of Education, if tuition costs continue to escalate, come 2016, the average price of tuition for a public college will have more than doubled in just 15 years. The New York Times recently reported that 94% of students who earn a bachelor’s degree borrowed money to pay for their education costs. And along with tuition costs, loan interest rates are rising as well. So, assuming you want to enroll or already are enrolled in a college and plan to borrow or already have borrowed money for your education, what are some ways you can deal with rising tuition costs and loan interest rates?

1. Realize that colleges are not going to warn you about student debt:

   
   
   When it comes to providing potential students with financial guidance, especially the total cost one can expect to pay in loans and interest after graduation, some schools are more straightforward than others, with for-profit schools being the least transparent. You will rarely see a warning about student debt in a university’s brochure or on its website. Be aware that both public and private universities are trying to sell you something, and that the information they provide regarding costs, financial aid, and even job prospects may be purposefully misleading.
   
   

2. Plan ahead:

   
   
   
   
   You have options for paying back a loan, and planning ahead how much you’ll need to pay monthly until your loans are zeroed out can help you determine which option is best for you. For federal student loan debt, the default standard repayment plan requires you to make 120 equal payments over 10 years. A guaranteed plan allows you to make lower payments in the first few years and higher ones later, with interest rising over the term of the loan. Extended, income-based, and income-contingent plans are other options available to those who take out a federal student loan. Before taking out a private loan, which will have a variable interest rate and can end up costing you more than you can afford, be sure you’ve investigated your options for scholarships, grants, and federal student loans.
   
   

3. Apply for aid every year:

   
   
   
   
   It’s in your best interest to apply every year for financial aid, even if you think you don’t qualify. Changes in your and your family’s financial circumstances, including a sibling enrolling in college as well, can impact your eligibility for financial aid. Be aware of and calendar out application deadlines so you can submit all the necessary paperwork in as timely a fashion as possible.
   
   

4. Create a post-graduation emergency savings fund:

   
   
   It’s never too early to begin an emergency fund, especially one for the first three, six, or 12 months after you graduate. Having savings in place that you can draw upon for rent, utilities, food, and other life expenses will allow you to use the money you’re earning at your first post-graduation job to begin paying back your student loans. If you don’t immediately find employment like so many college graduates, your emergency fund can help sustain you while you hunt for work.
   
   

5. Apply for Federal Student Aid:

   
   
   There are inexpensive federal funding options available to you through the Free Application for Federal Student Aid (FAFSA) website. Some federal funding options are not dependent upon financial need. Interest rates range from low to high, but there’s no charge to apply.
   
   

6. Federal loan forgiveness programs:

   
   
   
   
   Under certain conditions, the federal government will cancel part or all of a loan. To qualify for loan forgiveness, you must perform volunteer work, military service, teach or practice medicine in certain types of communities, or meet other criteria outlined by the program. The Federal Student Loan Repayment Program also allows federal agencies to establish loan repayment programs for their employees. Talk to your employer to see if they have such a program in place.