Winds of Change - College 2017 - 15

Controlling
Student Debt

Here's how to take charge of your finances
By Susan Biemesderfer

he student debt crisis has been in the headlines lately, and for good reason. Student
loans are now second only to mortgages as the country's principal category of
consumer debt. There are more than 44 million student borrowers with a total of
$1.45 trillion in debt - the average graduate from the class of 2016 entered the
workforce with more than $37,000 in student loans.
Managing major academic and financial responsibilities is a big challenge, and few graduates
make it through college without both taking out loans and working part time. Financial
pressures can be a key reason why students fall behind on credits, get lower grades, and take
longer to graduate. When it takes more time to get through school, students end up paying
more in tuition - often racking up more credits than they need and shouldering additional debt.

SAVVY FINANCIAL STRATEGIES
But here's the good news: as you balance
competing priorities on your way to your
college diploma, there are solid strategies you
can use to control debt. "The smartest
approach is to do everything you can to
maximize your non-loan financial aid while
minimizing your costs - both before and
during college," advises John F. Wasik, author
of The Debt-Free Degree.
Above all, it's important to remember that
you're in charge. "Never give up power over
your finances," says Andrew Josuweit, CEO of
Student Loan Hero. "Take advice from people
you trust, but they won't bear the costs of
borrowing like you will."
The decisions you make about the college
costs you incur and the student debt you
acquire will stay with you, so it's important
to be informed from the start. Here are
decisions with financial implications that
you should take seriously.

ISTOCK

BE STRATEGIC ABOUT THE
SCHOOL AND MAJOR YOU CHOOSE

If you're still shopping for college, experts
agree that it's smart to look for schools that
offer generous grants, tuition discounts,
and scholarships, some of which may be earaises.org

marked for students from underrepresented
communities. If you're thinking a big-name
school is a better choice than a lesser-known
institution, take a levelheaded look not only
at the tuition but also the other costs - including room and board or any commuting
expenses, books, and supplies.
And consider the financial benefit of
attending college in your home state.
According to the College Board, one year of
in-state tuition at a public four-year college
is approximately $9,410, compared with
$23,890 for out-of-state tuition.
Another possibility is attending one of
the growing number of colleges that have
dropped all loans from their financial aid
packages. Mark Kantrowitz, publisher and
vice president of strategy at cappex.com,
points out that there are now 15 such
institutions in the U.S., and that more than
50 colleges have eliminated loans in aid
packages for low-income students.
Also think about the academic program
you pursue. "Degree programs that lead to
relatively higher salaries and good job
prospects are worth investigating," says
Wasik. "It may even make sense to take on
debt for some programs because their higher
starting salaries will allow you to pay off your
loans more easily." Wasik recommends

looking at the long-term career outlooks
published by the Bureau of Labor Statistics,
which continue to show promising prospects
for STEM professionals.
BE STRATEGIC ABOUT
YOUR CREDIT HOURS

Every credit hour you take is an investment.
According to Department of Education
tuition data, the average cost for each credit
hour toward a 120-credit-hour undergraduate
degree is approximately $594 - that's $71,335
per degree. The analysis by Student Loan Hero
found that average credit-hour costs at fourand two-year public colleges were $325 and
$135, respectively, and at four- and two-year
private schools, $1,039 and $557, respectively.
What you pay per credit can inform a
broader money-saving strategy. The same
Student Loan Hero study found that by
earning their first 60 credits at a community
college, students saved an average of $54,659
on their undergraduate educations.
It's also important to consider the impact of
course load on graduation rates. Research
shows that students who consistently take a
full-time course load - 15 credits per semester
- are most likely to graduate on time. But
many so-called full-time students are not taking
the courses needed for an on-time degree.
One challenge is registering for a course
load that's (1) manageable in the context of
your other responsibilities and (2) will get you
to graduation sooner rather than later. Some
experts advise that taking a full course load can
give students a financial edge because when
they finish college sooner, they avoid additional
college costs - and they can begin collecting a
paycheck sooner. A study by the Community
College Research Center at Columbia
University found that college students who
signed up for 15 credit hours - rather than »

2017-2018 SPECIAL COLLEGE ISSUE * WINDS OF CHANGE 15

https://www.cappex.com/ http://www.aises.org

Winds of Change - College 2017

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