Don’t Become Tuition-Tangled in 2011

As the price of college education continues to rise, it becomes increasingly easy to get ensnared by educational debt. Many colleges even make the debt attractive by touting high average alumni salaries while encouraging students to borrow tens of thousands of dollars per year. While a college education is truly a valuable asset, you should avoid borrowing more than you have to. Whether you’re the parent of a student or in college yourself, your educational debt shouldn’t look like the yearly budget of a small state.

Borrow Smart
Student loans may be a necessary tool for financing at least part of your education. If you plan on taking out student loans, though, only select federal loans. Federally provided loans generally carry lower interest rates. Furthermore, they have attractive forgiveness programs for students pursuing careers in public service or with the government. For more information on federal lending, check out the official website at: http://studentaid.ed.gov/

Information about the federal forgiveness programs can be found at: http://ibrinfo.org

Get Scholarship Savvy
Universities provide a myriad of different scholarships. Some are based upon prior academic achievement, some are designated for specific ethnic groups, genders, or members of organizations and others are reserved for students from specific geographic regions. Scholarship requirements are often quite specific, so contact your institution’s financial aid department to inquire about what may be available.

Also search the internet for private scholarships. Many companies, nonprofit organizations, or community clubs provide scholarships. Again, the requirements may be very specific, so be sure to search thoroughly. Your membership in the Western Nebraska Basket Weaving Club may finally pay off! A popular website for locating private scholarships is http://fastweb.com

Consider Work-Study
The Federal Work-Study Program provides funding for students who work part-time during the academic year, typically on campus. Usually, students only work a few hours per week. Contact your institution’s financial aid office to find out whether or not this program is available to you.

Get Friendly with Family
A “529 plan” is a specialized college savings fund that allows family members to contribute to a relative’s education. These 529 plans fall in to two categories: savings plans and prepaid plans. The savings plan functions much like a 401k, investing the contribution in mutual funds or other similar investments. The prepaid plans allow relatives to purchase tuition credits at discounted rates.

Start Saving Early
It’s never too early to start saving if you’ve got young children. Create a high interest money market account at your local bank and use it as a college fund. If your son or daughter is 10 years old, and you begin saving $150 a month now, you’ll have over $15,000 saved up by the time their first tuition bill finds its way to your mailbox.

To sum it all up, college is an increasingly expensive endeavor – but it doesn’t have to break the bank. With a smart plan, you can graduate college (or send your children to college) without being tethered to a lifetime of debt.