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career transition

How to Go to College Without School Loans, Debt-Free College Should Be Your Goal Part 2

Debt-Free College Can Happen When You Understand The Various Options You Have

Going to college without student loans should be your goal, stay debt-free

Getting a debt-free college education begins with a deep understanding of the different types of colleges and universities. There are many different types of colleges you can attend, and it is important that you know the difference between them. Not all colleges and universities are good for all people.

You must know which is best for you, both financially and academically. I will start with a brief explanation of junior colleges, (also called community colleges), and end with for-profit colleges.

Junior Colleges Your Best Value for Debt-Free College:

If you want to get a certificate or a 2-year AA (Associates of Arts) degree in something that has high job value, the community college is a best value. If you are poor, low income or a struggling single parent you may be able to attend with a Pell Grant, avoiding loans. If you do have to get loans they may be minimal.

Do your research, and work out your best solution. You must keep yourself motivated if you attend a community college. Some find it difficult to focus since you are no longer in high school, but also you don’t have the attention of a four-year college.

You can also later transfer to a four-year college to complete a bachelors’ degree if you decide to get it sometime in the future. Transfers are allowed at most four-year colleges.

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State Colleges and Universities:

Your absolute best value for colleges and universities, under junior colleges, are your state colleges and universities. These colleges and universities have the lowest cost of tuition and fees for a four-year degree for most colleges. The books and room and board, as with all colleges and universities are extra.

If you live at home or with a relative a state college or university can be a real value and leave you with little or no loans. Most employers in local towns gives preference to their local state college and university students for employment, since they usually know the quality of those schools.

For poor and lower middle class students many can go to their local four-year college with a Pell Grant and part-time job, leaving them with no school loans if they live at home. This is huge. Most HBCUs are priced similar to state colleges, a few are priced as expensive private colleges or universities, so remember to do your research.

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Private Colleges and Universities:

This includes famous and not-so-famous colleges and universities. Some of the colleges that fall into this category are expensive Christian schools, some are ivy league schools and some are small little known colleges and universities. They all have one thing in common, and that is enormous costs.

Enormous costs that will leave you with school loans of $40,000 to $200,000. This is a near tragedy for poor or middle income students, these loans could take 30 years to repay. No college graduate should be braced with that much of a load on their backs for so long.

These schools have enormous hidden costs, so it is imperative that you research costs at the schools’ website, otherwise you could be left with severe sticker shock after you start. You can get a good job if you go to an inexpensive school, as well as an expensive school, so why not protect yourself, your finances, and your future, with a low-cost college or university.

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For- Profit Schools, Colleges, and Universities:

In for-profit colleges, the learning is usually quick, the courses are short, and the costs are high. How do you know if a school is for-profit? They do a lot of advertising on TV, they are usually located in a strip mall, business park,  office building or online only – they don’t normally use college campuses. When you research for-profit schools the graduation rates are usually very low and the student loan pay-back is also very low.

They offer short, quick programs and degrees. You may have to do a lot of research to find them listed as for-profit online. Some of them claim to be non-profit, but they are not. Many of them give college degrees in a little as 1-2 years, or certificate programs in as short as 6-8 months. Some employers don’t recognize degrees from for-profit colleges. Since for-profit colleges have been accused of and found guilty of numerous problems against students, some are now calling themselves non-profit. But, they are still for-profit with another name. Most are located in office type buildings, or store fronts, they offer quick classes and very poor financial aid packages, with education that is not always recognized by employers.

Get Debt-Free College by Knowing Your Options, Go Here

The biggest problem with these schools are that most of them include loans for even the poorest students, the courses are often times quick, they offer a lot of certificate programs that require the passage of an exam to get your certificate.

Many kids don’t pass the exam because the courses are so quick, so they don’t get their certificate, and now they have loans with no ability to get work. This is usually the most difficult way to get debt-free college.

The government has recently cracked down on for-profit schools since the default rate on exams, including board exams is high. One for-profit nursing school had a pass rate on board exams of zero. None of the students passed the nursing board exam, but they all had loans they could not repay.

One type of for-profit school that was closely scrutinized was found to brace students with near $80,000 in school loans, this was the Corinthian Colleges.

After petitions and media attention, the government forgave all their student loans with forgiveness, this is rare. The problem was that students could not get jobs after attending. The employers told them they did not recognize the school as adequate for job placement.

The students were told they would have no problem getting jobs when they enrolled. Itt technical Institution was recently shut down due to its predatory methods against its students.

It is a part of the government crackdown on predatory for-profit schools. You can search google for a list of for-profit schools that have been closed by the government. Understand the current student loan debt crises to keep your student loans at 0 or very low.

Financial aid packages in for-profit colleges almost always includes loans, and for many who can’t get jobs, it is not possible to pay the loans back. These loans can leave students with a lifetime of poor credit.

Your best bet for debt-free college:

The best way to get debt-free college is 1. Go to a junior (community) college on a Pell grant, work part-time, and live at home. 2. Go to a state college or university with Pell grant, work part-time, get a relative to help, and live at home. 3. Go to a state college or university with the help of a relative or on a full scholarship. 4. If you decide to go to an expensive private college or university, go with the help of a relative or a guaranteed full scholarship or fellowship for graduate school.

Understand that cost is the most important factor when it comes to choosing an education with debt-free college. It is absolutely essential that you know all cost and academic programs of your chosen school, by reading their online catalog. A last reminder, that if you do not pay off student loans you have signed for,  and you get behind, the government will catch up with you, and garnish your check.

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Five Career Transition Financial Tips and Budget Planning

Career Transition Financial Tips and Budget Planning
five career transition financial tips and budget planning.

Budget Planning, Career, and Finances are at the top of everyone’s minds these days. You can’t listen to the news or read the newspaper without hearing some mention of the economy. Those who are in a career transition—or soon to be—may already be stressed out by financial issues.

A recent financial adviser forum I attended provided five Budget Planning Financial tips on financial management for those in transition at a Career Networking Group.

1) Write Down Your Monthly Budget

Budget Planning 101: This is a scary and painful word for some people but having a written budget plan is a critical first step for those who need to manage their money—especially those in transition. A written budget plan spelling out the exact dollar amounts of where your money is going will help you make necessary cuts.

For example, you might discover that eating out is costing you $50 a week. Staying at home or bringing a snack could drastically cut this cost.

A budget will also help you determine how long you can stay afloat without working.

Another bonus to having a written budget is motivation. Knowing the number of weeks you can manage without dipping into savings will often motivate you to step up your networking and other job search activities.

2) Work With Creditors to Avoid Hits to Your Credit Report

Procrastination is a big problem for people facing a financial crisis. However, financial problems won’t go away just because you ignore them. Having a written budget can help you reallocate money to pay down your bills. You could even send your budget to a company when negotiating a payment schedule.

Working with creditors may also help with FICA scores. Many companies report delinquent and failed payment to the credit bureaus. This can negatively impact your job search because many companies screen applicant’s financial backgrounds before offering a position.

It is impossible to plan without knowing exactly where your money is going. Writing down your budget plan is a way for families to make positive steps to staying financially fluent. In the event that you don’t find a job before feeling the financial pinch, you should try to work out a payment agreement with creditors as soon as possible.

3) Consider Opening a Home Equity Line of Credit or Using the HARP and 72T Programs

Many people are under the mistaken impression that opening up a home equity line of credit will negatively impact your credit report. However, if you are only approved for the money, but don’t start using it, your credit score won’t be impacted.

This step is best done when you and/or your spouse are working because it may be harder to obtain once you lose your job. You may never need the money but using a home equity line of credit often offers better interest rates than using credit cards. This is a last resort option, using money from savings or an extra job is a primary option.

There are several federal and state programs that help people stay in their homes:

HARP is a federal program that gives people in their primary residence, who do not have enough equity to refinance, get a lower interest rate. This is especially helpful for those who find that their home is worth significantly less than when they bought it. Contact a mortgage professional if you are interested in this option.

72T is a provision in the IRS code that has been around a while. It is more beneficial to individuals aged 50-59 and gives them the option of taking money out of a 401k without the 10 percent early withdrawal penalty. This program works as a bridge to retirement.

4) Continue or Purchase Term Insurance as a Budget Planning Tool

Many people in career transition make the mistake of dropping term insurance. Companies often carry this type of insurance or something similar for employees; however, this insurance isn’t portable. Once you are no longer working for the company the coverage stops.

Term insurance, which usually just covers a select time period, tends to be less expensive than permanent insurance. Permanent insurance has a cash value but insurance premiums are much more expensive than term insurance. Once you start working it may make sense for you to upgrade your term insurance policy to a permanent one.

The advantage is that you lock in the lower rate (the earlier you purchase the insurance policy the better the price), you don’t have to re-qualify with a medical exam or medical questions and you get the benefit of building cash value.

5) Work With an Independent Financial Adviser

Being out of work for longer than a few months forces people to make some tough decisions. Sometimes you and other family members are too close to the situation to be objective even after you have actively engaged in budget planning.

Your financial adviser can help you develop a plan for you and your family to get through this difficult time.

Choose your financial adviser carefully because they are not all the same. Some financial advisers are tied to certain products which they will try to push their clients to purchase in order to increase their own numbers and/or commissions. Find an adviser who can give you the facts and a plan without being influenced by the need to push certain products. Do plenty of research before you decide on a financial planner as part of your budget planning process.

Bonus Tips

Check your credit history for free at AnnualCreditreport.com. Once you know what information is on these reports you can ensure accuracy, send in a note explaining a particular situation and track how your credit is being reported.

Individuals are eligible for one free report each year from each of the three credit bureaus (Transunion, Equifax, and Experian). Check your credit report every four months by contacting a different bureau and requesting a report.

Easy Budget Planner is a great tool for clean, crisp budget planning. You can use it over and over, and it will grow with you as your budget grows.

Easy Budget Planner is clear, concise and has sound advice along with MsfinancialSavvy Saving Money Articles and Budget Planner eBooks for creating a sustainable budget and getting out of debt.