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8 Expert-Approved Ways to Pay for School

5 minute read

By Jim Greene

Students commonly face a particularly difficult financial catch-22. That is, you can’t get a good job without postsecondary education, but postsecondary education is very expensive. Thus, millions of young people graduate with tens of thousands of dollars in debt. That puts them behind the proverbial 8-ball from the very moment they enter the workforce. It’s a tough way to start out in the “real world.”

Student loans are widely available. Far too many young people automatically jump at the chance to get them. However, personal finance experts recommend saving them as a last resort. Those loans can be tough to pay back, so only use them after exhausting all other avenues. What avenues are they talking about? Here are eight.

Open a School Savings Account

Many financial institutions offer special savings accounts with high interest rates and tax advantages that make it easier to save up for school. However, the caveat is that parents need to have the foresight to open one early. They work best if started when children are very young, allowing future students to take full advantage. Considering average interest rates and the amount the typical family is able to contribute to these accounts, it can take a decade or more to realize meaningful returns.

Even if that window of opportunity has closed, you can still accelerate your savings with one of these accounts. Every penny you contribute helps your cause. Expert analysis shows that these financial products remain underutilized by both students and their parents.

Delay Your Enrollment

Young people often feel pressured, either directly or indirectly, to proceed to college or university straight from high school. Sometimes, this pressure comes from parents who are eager to see their children start down the road to success. In other cases, it comes from peers. Young people don’t want to feel left behind when everyone else they know is headed off to college.

However, this can be a mistake — especially if you’re not sure what you want to study. Instead, take a year or two off between high school and college. Find a full-time job, live at home, and save some money. If you aren’t sure of your future educational or career path, use this time to figure it out.

At the end of your sojourn, you’ll probably have thousands of dollars in your bank account that you can use to ease the financial sting of enrollment. Even better, you’ll have a clear idea where you’re heading in your studies. That will hopefully help you to not waste money on a degree that doesn’t help your long-term career goals. Speaking of that…

Choose Your Program Wisely

Many guidance counselors encourage young people to study what interests them. To an extent, this is certainly excellent advice. However, it also doesn’t hurt to mix in a little practical planning. Think about the range of careers available to graduates of the study path you’re considering. Try to identify a program that supports entry into high-growth, high-demand careers — even if it means making a few trade-offs when it comes to your major. You can always pursue your passions on the side, in the form of electives, minors, and future degrees down the road.

The U.S. Bureau of Labor Statistics is an excellent resource to help your research. It provides in-depth snapshots of thousands of career paths, with average salary data and job growth projections that can guide you to where the jobs are, both now and in the future.

Consider Alternative Study Options

Community colleges and trade schools often get overlooked by young people who flock to four-year colleges to pursue degrees. However, practical training programs offer enormous advantages. They tend to cost far less, can often be completed in less time, and often lead to well-paid jobs with strong growth profiles. You should definitely consider them as an alternative study path.

For U.S. readers, there’s another money-saving option. Spend your first two years in a junior college or community college, working toward an associate degree or pre-college certificate. Then, transfer to a four-year college to complete your bachelor’s degree. This path could help you save tens of thousands of dollars in tuition costs and living expenses, all while leading to an identical degree designation.

Take Advantage of Government Aid

American readers should know about the Free Application for Federal Student Aid, or FAFSA program. By submitting a FAFSA form, applicants will automatically be considered for the full gamut of federal government student aid programs available. It includes not only loan programs but also bursaries, grants, and other situation-specific aid sources that may be offered to you, depending on your personal and financial situation.

Hunt Down Scholarships

Scholarships are excellent education financing sources, since the money does not have to be repaid. They are offered by governments, philanthropic organizations, businesses, commerce associations, and professional organizations to identify and assist promising up-and-coming students.

You’ll have an easier time qualifying for scholarships if you’ve demonstrated exceptional academic achievement, been active in extracurriculars, do a lot of volunteer work, or have otherwise distinguished yourself through community service. Racial and ethnic minorities and people from disadvantaged financial backgrounds also tend to benefit from specialized scholarship programs. You might also be eligible based on what you plan to study. This resource from the U.S. Department of Education can assist your search.

Try Negotiating

According to this CNBC report, many students accept the initial financial aid package they are offered upon acceptance to a pricey college. They do so without realizing that schools often leave room for negotiating. Few students take advantage of this opportunity. As a result, they could leave thousands of dollars in value on the table.

According to CNBC, American postsecondary institutions budgeted about $80 billion for student financial aid in 2017. An estimated $15 billion to $20 billion of that total was earmarked for appeals, in which students try to negotiate a more generous package. Around 50% of those reserves remained unused. Thus, if you’ve been offered institution-based aid and you think you can do better, go through the appeals process to try to extract more value.

Join The Workforce, Then Upgrade Your Education

Another route that few young people consider is having their employers finance their educations. Many businesses, especially larger companies operating in competitive sectors, offer financing programs to employees who want to upgrade their educational credentials. For instance, your employer might be willing to shoulder part or all of the cost of your MBA degree. Most times, they will tell you about these programs during your interview or orientation process. However, you can also check with HR to see if they are available.

These offers usually come with strings attached. You may have to study part-time while continuing to work. You may also have to agree to remain with the company for a specified period of time after completing your degree. Check out this list of companies that offer education reimbursements as part of their employee compensation packages.

Rounding It All Up

If you’re able to use these strategies to finance even a small percentage of your education costs, you’ll be well ahead of the curve. Even with these benefits, many students still cannot avoid taking out loans to pay for school, given soaring tuition costs. Should you need a loan, look at government and public options first. Only consider private loans as an absolute last resort, as their repayment terms tend to be much stricter.

Student Graduation Cap on Money RollShutterstock

Jim Greene


Jim Greene is a freelance writer based in the Toronto, Canada area. He has been writing professionally since 2001 and has an extensive professional background in consumer research, personal finance and economics.


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