Debt-Free College Can Happen When You Understand The Various Options You Have
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.
Get This Amazing Free Personal Finance Course to Improve Your Money IQ
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.
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.
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.
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.
Lois Center-Shabazz | Course Delta Agency
Interested in a Free Discussion about how I can help you with Fantastic Finances? Let’s Chat – Make an Appointment Here
How I Build Fantastic Finances ; Read More…
Don’t forget your free sample copy of “The Ultimate Guide to a Great Money WorkOver“
You Can’t File Bankruptcy on Student Loans, Understand College Without Student Loans, and Subsidized vs. Unsubsidized Loans.
There are many reasons you should strive to go to college without student loans, one is the crushing pain of debt, another is that you are not allowed to file bankruptcy on student loans due to hardship.
If you start a business with any amount of money and your business fails, you can file a business bankruptcy on your loan balance due and later start over with replenished credit. If you buy a home and fail, you can short sell your home or let it go into foreclosure and you can later buy another home, once your credit clears.
This is not the case with student loans, politicians have rigged the system, so no matter what, you have to pay. You only have a short grace period after you graduate, but your grace period, if you don’t have a job, you still have to pay. If you don’t have a relative who is willing to step up and make the payments until you get a job, your life can be ruined forever with bad credit.
The unpaid school loan balance grows exponentially due to collection agency cost and interest on interest overdue charges. The balance can double every 3-4 years until one day you open a letter and find you owe $100,000 on an original $5000.00 student loan. It has happened to many and it does not have to happen to you or anyone else.
Recent New Programs to Save College Students Credit
The new programs the Obama Administration created for college students with student loans has made payback easier, but you must apply for them, and even though your payments are decreased to an affordable rate until you find a decent job, you must still make your payments. There is no hardship benefit for most.
The program is called the income-based repayment program. There are others as well. This program is mostly for government subsidized loans, but there are programs for private or unsubsidized loans, but they are more difficult to get them to help you. If you delay regular student loan payments with an income based repayment plan, the delay in paying interest can raise your balance two to three times the original loan balance. So, it is recommended that you do EVERYTHING in your powers to make your reglalar payments. The situation is direr for unsubsidized loans; these lenders can be brutal.
It is better to find an actual loan forgiveness program. There are different types of programs listed at Consumer
They charge interest while in school, and you don’t get the benefits that come with government subsidized loans. Subsidized loans don’t charge interest while you are in school and therefore cost much less than unsubsidized loans, sometimes as much as half.
Get This Amazing Budget Planner to Start Your College Planning
I Went to College with Almost no School Loans
I went to graduate school with a horrible amount of school loans so I know the difference. I had unsubsidized and subsidized, it seemed to take forever to pay off my unsubsidized loans. In college, I had one very small subsidized loan that took only a couple of years to pay off. I figured out why my unsubsidized loans took so long to pay off, but by then it was too late, I just suffered and eventually, they were paid. It took me a total of 12 years to
pay off my loans, it would have been sooner if I figured out the game they were playing with interest and time.
When it comes to graduate school, most of the financial aid is student loans, and some the predatory unsubsidized loans. Focus on scholarships or fellowships if you plan to go to graduate school.
I Was Lied to About the Cost of my Private University Graduate School Up Front
It is extremely important to research each and every school you consider attending before you apply. I attended a state university for undergraduate school and had no problems with loans. I only had to take out a tiny loan, which I paid back quickly after graduation. I researched every school I considered attending graduate school.
The one problem I had with the graduate school I actually attended was that I did not include current students in my research. I was given an estimate of the cost of attendance for four years by the student affairs office. It turned out the actual cost was double what I was told, and that was after I lived like a pauper in graduate school.
At one point I planned to leave because the costs were getting out of control, but after a lot of introspection, I decided I was half way there so I should finish. I don’t recommend you go to a private school unless you have a full scholarship, full fellowship, rich parents or family members who can pay for your college.
If you are poor or middle class your financial aid package will be lop-sided with huge loans, and in some cases bad unsubsidized loans. You have to ask yourself; Do I want to spend the rest of my life paying on school loans? It could very well happen if you attend a school too expensive for your budget.
Understand Student Loans and College Cost with This eBook
Do Your Research Before You Apply to Colleges That Interest You
Every college and university catalog is currently, online. If you have a computer at home, you are all set. If you do not you can go to your local library and use the computer there. Here is what you do. First of all, look at the cost, many of the more expensive colleges have their cost hidden, so don’t give up, it’s there. Search total cost to attend college X (substitute the name of each in the X field).
You should find a grid. In that grid, it will explain all of the costs for four years, down to the paperclip. I have looked, and it is the norm, I did not find a single college or university without the four-year cost of college grid. The private schools will display outrageously expensive costs, some of them I looked at a cost between 200.000-300,000 for four years.
Those costs are definitely for rich kids or the lucky few who get guaranteed scholarships. It makes no sense at all to go to a school like that with a financial aid package that includes school loans.
Your loan bill at that school could definitely scar you for life. You will have either a lifetime of loan payments or have a good chance of a lifetime of loan default if you become ill, disabled, or can’t find a job that pays enough to make the payments – there are no guarantees. Coming Soon, Part 2 of this article.
As of 2017 we now have a new administration. They have not said what they will do with student loan fulfillment problem, but have hinted toward doing nothing, and taking down the Consumer Protection Financial Bureau website. Because of this, the student loan crises could hit epic proportions if students continue to have more debt than they can pay with low job opportunities including, no job or low paying jobs.
Lois Center-Shabazz | Course Delta Agency
->Interested in a Free Discussion about how I can help you with Fantastic Finances? Let’s Chat – Make an Appointment Here
->Get Your FREE Fantastic Finances Tips Course by eMail
->How I Build Fantastic Finances ; Read More…
Your Scholarship Search
Understanding financial aid and all it should offer you can keep your student loans low. When you apply for financial aid and you are low or middle income, you may qualify for a financial aid package. That package usually includes loans, the more expensive the school, they larger your loans will be in your package.
The best defense against high debt is high grades in high school or college. Either can lead to college scholarships. Your scholarship search should be extreme and early in high school. Search and apply as if your life depended on it. Ask family members to help, show them your grades, discuss your plans.
Many scholarships go unfunded simply because there are no applicants. Study and understand everything about financial aid at the federal financial aid website, FAFSA, that is where you can avoid financial aid mistakes the most.
And mostly, apply early, and place every single college you remotely think you are interested in on your application.
When you apply online, which is best, the college you choose will be the college your award is forwarded to.
Study and understand everything about financial aid at the federal financial aid website, FAFSA, that is where it all starts. And mostly, apply early, and place every single college you remotely think you are interested in on your application.
When you apply online, which is best, the college you choose will be the college your award is forwarded to.
Don’t Go to College Blind
Avoid financial aid mistakes by reading your college catalog online, understand all your college offers, this you should find information about financial aid at your given institution. Your registrar’s and financial aid office will have more. Understand what courses you must take to graduate with that degree in four years.
If you are not sure what you want to do, you should have some ideas since you are going to college. Choose at least three fields you are interested in and have good job prospects, make sure you get the general education courses to major in each of those three fields. No matter what, major in one field by the beginning of your third year so you can graduate in four years, get a job, and start paying down debt right away.
Don’t linger with indecision, and don’t allow yourself to get loan defaults, and later a lifetime of bad credit. Your credit rating is one of the most important assets you have for getting low-interest rates later and your ability to rent an apartment, buy a car, or buy a home.
There are many ways you can go to college debt-free if you concentrate on affordable colleges, Pell Grants, scholarships, understanding financial aid packages, living at home, working, and relatives helping, should keep you with low or no debt.
Should You Refinance Student Loans to Make Payments Affordable?
Some students will not have an option except to refinance student loans because the payments are way too large for their income. If you can pay on student loans as soon as they are due, make your payments plus an additional to principle balance, so the loans are paid off quickly.
At the same time, of course, remember to place a monthly payment in your savings account for a rainy day. The best student loans, as I have said, are government subsidized loans since you don’t have to pay interest while you are in school.
The best refinancing options are also government refinancing programs. If you refinance with private companies, you could lose the loan benefits you get with government programs. One such benefit is loan deferral if you return to school, a hidden higher interest rate can be found in private loans or tax benefits of interest deductions in government loans.
If You Pay Off Your Student Loans Early
If you pay off your student loans early or on time you will have a peace of mind you never thought attainable. That is how I and many of my friends felt when our student loans were paid off. When I graduated from dental school and my student loans became due before I got a job, I felt I would be in this debt box forever.
Knowing I had a large student loan balance every month when I made my payments, it always gave me a sinking feeling. When I graduated there
When I graduated from graduate school there were no government loan repayment programs and my financial aid was only student loans. The Income Based Repayment Plans and the non-profit service plans, were recently put in place by the Obama Administration.
I knew if I did not make my loan payments, even when I had no job, the loans could balloon out of control if I got sick or experienced long-term unemployment. I spent a lot of time figuring out how to get out of this box of miserable student loan debt.
Avoiding Financial Aid Mistakes Requires Research
I finally came up with the solutions that I am sharing with you in this article on student loans and my previous two articles. The solutions start way before you start college, but it is never too late to figure out how to pay off student loans and maintain your credit rating. It begins with understanding financial aid for college and all options that surround it.
College Without Student Loans
As a part of the health care reform bill President Barack Obama signed a long over due education reform bill as a part of the health reform package. College has become progressively more expensive and less affordable for the middle class in America. The education reform bill is absolutely essential.
The key points of the education reform bill is as follows:
1. Ends subsidies to special-interest private lending companies, cutting out the middle man and decreasing the cost of school loans.
Under the current program banks can act as the middle man for federally subsidized student loans, collecting billions of dollars in federal subsidies, protecting either government money or bank money from default. Under the new program, starting July 1, 2010 banks can still offer student loans, but they are not guaranteed by the government. Cutting out the banks as the middle man will create more money available for more and cheaper college school loans, coming directly from the government.
2. Doubles funding for Pell Grants to help more students afford a college education.
The extra money from decreased bank subsidies will go to more and larger Pell grants. Pell grants are targeted to low and moderate income students, more than $40 billion will go toward these grants. The maximum award will increase to $5,975 from $5,550 and the number of available grants will nearly double.
3. Will cap a graduate’s annual student-loan repayments at 10 percent of his or her income.
This will insure that every graduate can make their school loan payment, therefore decreasing the amount of school loan defaults and saving graduates credit ratings. For students who make their payments on time the government will forgive their balance after 20 years, instead of 25. Public service workers (teachers, nurses, police officers) or those in the military will see their loans forgiven after 10 years.
4. Helps an additional 5 million Americans earn degrees and certificates over the next decade, by revitalizing programming at our nation’s community colleges.
Community colleges, a growing population, will receive $2 billion over the next 4 years.
5. Increased funding to HBCU’s.
Over the next 10 years these colleges will receive an additional $2.5 billion in funding. Get more personal finance education here.