Sunday, June 8, 2008

Paying for College in a Tough Economy


Both students and parents are worrying about the availability of student loans for college this fall as the crisis in the financial sector begins to affect education loans.

One way the US Congress is addressing this is by announcing that the federal government plans to now purchase and invest in education loans. The hope is that this will give confidence to lenders, allowing them to make new loans for vocational training and higher education. The solution on the table from congress is for one year only and there are no long term solutions being considered right now.

In the 2007 – 08 year, the federal government made or guaranteed almost $110 billion in student loans including Stafford loans for undergraduate college students and PLUS loans for parents or graduate students.

If you don't have a private education fund that you can tap and funding your vocational training or career education program is a challenge for you, consider exploring the following:

- Research or ask about and apply for scholarships. Do not just look to your vocational school for scholarships since there may be opportunities they don't know about. A student in a vocational training program recently told me about a scholarship program sponsored by the property management company that oversees the apartment complex where she lives.

- If you participated in special clubs or activities in high school, there may be private scholarships available, if you choose to continue the activity in school. Music and art teachers are a great source of private scholarship information from donors or even alumni.

- If you were not thinking about working, think about it now. Although 300,000 jobs have been lost this year, and the US is flirting with a recession, there are still part-time job opportunities available. These might be even more popular when employers want to keep costs low and do not want to higher full time employees.

- Consider a public or state funded vocational program rather than a private school. Tuition is definitely lower for in state students. If your goal is to compete a 4-year degree at a later time, completing 2 years at community college will save you a lot of money and give you a lot of transferable credits.

- Negotiate full or partial tuition reimbursement with your current employer. Many companies will support the cost of additional education and relevant training if they see your education as an asset to the company.

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