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Going Back to School?
Get Smart About College Spending
By Tracey Ferdinand
It is easy to get bogged down weighing the pros and cons of pursuing a degree. On one hand the higher your degree the higher your earning potential. On the other hand the cost of education is rising much faster than inflation. Depending on the school and degree, tuition, books and other miscellaneous fees can add up. Yet just like any other investment, research and planning can save you money in the long run. So when
it comes to college spending it is only fitting that you get smart about your education.
One of the most important things to remember when making the first move back to school is to fill out your FAFSA early. FAFSA, the Free Application for Federal Student Aid, is an application used by the government to determine how much monetary assistance you are eligible for. Ideally it should be done at the beginning of the year if you plan on starting in the fall. The website http://www.fafsa.ed.gov/ has an online application which is usually processed much faster than paper applications. It is important to submit this application early because some schools can and do run out of funding! Smart women do not pass up free money because of procrastination.
Consider attending a two-year community college and then transfer to an accredited four-year institution; you can save so much money attending a community college. Once you transfer to the four year institution you earn the same degree as some one enrolled all four years. Smart women know how to achieve their goals without breaking the bank.
Be cognizant of how much money you will be making and the growth potential of the field you are interested in. A degree is not a job guarantee. Visit the Occupational Outlook Handbook on The Department of Labor’s website at http://stats.bls.gov/oco/. It describes the average earnings of each field and the expected growth rate. Of course when choosing a career aspects other than money should be considered; however, it is important to understand the average earnings of the degree so that you know how much of a school debt is too much. Smart women plan ahead and are aware of what to expect.
Avoid private loans like you avoid the dentist! Stick with Federal Stafford loans if you have to borrow. Federal loans have a much lower interest rate than private loans. This year the interest rate on Federal Stafford loans was moved to 6 percent compared to 14 percent for Sallie Mae loans dispersed in 2005. If you must take out a private loan monitor how much you are borrowing and try to pay the interest while in school. Tim Grant—a writer for the Pittsburg Post Gazett— notes that “Lenders typically recommend that monthly student-loan payments not exceed 8 percent of the borrower's pre-tax income to ensure they have enough to cover taxes, car payments, rent or mortgage payments and household expenses.” Smart women only borrow money for education from private lending institutions as a last resort.
Finally, never buy all your books before the first day of class. This is not kindergarten folks. You will not get into trouble for not having all of your books on the first day. Sometimes professors list books that you never use or use sparingly. Pay attention when they mention what books are absolutely required. Once you have your required book list do some bargain shopping. Compare the school’s bookstore prices to online sites like half.com or amazon.com prices. Make sure you know the book title, edition, author and ISBN number so that you are not stuck with the wrong book or edition if you do decide to purchase them online. Also, do not forget to add in shipping and handling to the total cost when comparing prices. Smart women shop around.
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