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News Flash: You Do Not Need To Borrow High Student Loans To Get A Job

drowning George WashingtonHigh student loans continue to hound the younger generation. It seems wrong somehow that they get themselves into so much debt while so young. It is tough to watch that even before they can earn their own income, they have to worry about debt payments.

That is some really bad news about student loan debt. If we cannot solve this soon, we might be prepping up our children’s future to be as disastrous as the recession of 2008. You have to realize that the most recent economic crash was only as bad as it was because of the consumer debt that the average American household had. The government had to swoop in to help those struggling with debt payments and our taxes had to be diverted to that cause.

You do not want to have your child to get used to a life of debt now would you?

The student loan debt crisis is getting worse

Before you borrow that huge amount of money for your college education (or the education of your child), you need to look into a couple of facts first.

According to the most recent statistics from the Federal Reserve Bank of New York, the already high student loans is still increasing. The news release published on revealed that by the end of 2013, the total student loan is at $1.08 trillion. That means the increase from Q3 to Q4 last year was at $53 billion. From 2012, the whole increase of the student loans in 2013 is $114 billion.

That is a huge increase considering that the country is still far from fully recovering after the 2008 crash. Not only that, the debt is keeping young adults from pursuing their lives to the fullest. Here are some of the drawbacks of having high student loans.

  • You are forced to choose a job that pays a high income even if it does not make you happy. They immediately put income as a priority even if it will not give them the best training for an exceptional career.

  • You cannot invest in a home or a new car. Since your loan eats up a portion of your income, you are unable to buy a home at the right time or even a car. You have to prioritize your debts so you can keep yourself from defaulting on your loan payments.

  • You are bound to delay certain life events. Sometimes, too much debt delays a lot of milestones in our lives. For some people it can be getting married or having kids. These entail costs and that can be delayed for lack of finances.

These are only some of the things that high student loans can bring to your life. But what can you do about those student loan payments that you cannot afford?

Obviously, you should try to avoid them.

Study reveals that high student debt may be unnecessary

Most people think that they have no choice when it comes to student debt. The only way they can get a good job with a good compensation is when they get to college. In essence, there is some truth to that.

According to a study published on, the educational attainment of a person affects their income in the future. Those who did not graduate high school only earn an average of $32,631 a year. Those who graduate high school but did not go to college can earn $52,199. Those who got an Associate’s Degree can earn $63,008. While a Bachelor’s Degree and higher can earn $100,637 and above.

These figure tell us that a higher education is necessary to get an higher income. We are not really contesting that because a college degree is a good way for you to earn the income that you will need in the future.

But here’s another question that you need to seriously consider as well. Does an Ivy League school get you better job opportunities than those who went to the not so famous colleges or universities? Apparently, the answer is no.

A poll study that was published in revealed that knowledge and capabilities will always stay ahead of the school where an applicant graduated from. The details of the poll are as follows:

  • Only 9% of business leaders believe that the college where the graduate got their degree from is very important while 30% of the average American believes it is very important.

  • 42% believe that the major of the college graduate is somewhat important while 47% of the average American think that it is very important.

  • 84% believe that the knowledge of the job applicant in the field is far more important than any other factor in their education.

  • 79% rank the applied skills related to the industry is very important.

The last bit of information tells us that even your college degree is not as important as your knowledge and skills about the field you are trying to enter. The bottom line of this study reveals to us that your Ivy League school is not a prerequisite to get a job. You may be qualified to earn a high income but if you cannot even get a job, your Ivy League education will prove to be worthless.

Truth is, you may still need to borrow money to get to college. However, it does not have to be high student loans because you are not compelled to enter into a prestigious school to get ahead in life. That is not a necessary investment. The important thing is to get a college degree and make sure that you will also develop the right skills that will help make you an asset in the company that you will apply to.

How to avoid too much student debt

Despite the fact that you will still need to borrow money to go to college, there are also ways for you to keep it from becoming a big amount. Here are some tips that we have for you.

  • Save up for it. This is obviously only for those who still have time to save. The money you will save can be set aside so you can pay your tuition fee in cash. Or if it is not enough, you can at least lower the amount that you have to borrow.

  • Choose practicality over prestige. While you may want to feel good about going to a prestigious school, it is important that you be practical first. When Laszlo Bock, the senior Vice President of Google who is in charge of hiring was interviewed by The Times, he revealed that a lot of college do not deliver as promised. In the interview published on, he even mentioned that those people who do not go to school but end up making their way nevertheless are the exceptional people. When hiring, Google is after talent and not so much the brand-name colleges.

  • Get a part time job. The only way that you can really develop your talent for your future career is to practice it. That being said, getting a part time job will help you accomplish that and so much more. You can hone your skill and at the same time, get the funds that you need to keep student loans to a minimum

  • Budget your money. Regardless of how much money you have, you need to learn how to budget your finances to keep it from running out on you. Learning to use a budget to stay out of debt is one of the ways you can proactive about your personal finances.

  • Do not acquire other debts unless you have to. We are actually taking aim at credit cards. College students and credit cards can be a dangerous mix if they do not know how to use it properly. If you have student loans, you may want to keep your hands off of other debts.

You have to remember that high student loans are not necessary to succeed in life. A college education is important – but you do not have to put yourself in debt for it. You just have to be really resourceful when it comes to finding the money that you will need to fund your college degree.

How To Prepare For School Year 2014-2015 College Costs

books with a mouseWere you aware that college costs rise faster than the inflation rate? The increase of higher education costs rose to 4.8% in 2012 – more than double of the inflation rate that is only around 2%. This is the reason why a lot of students are thinking about skipping a college degree to avoid the inevitable student debt. Some of them opt to go straight to the blue collar workforce that will give them a lower income – but will keep them from the bonds of debt.

As the overall student loan balance rises, you may be wondering about the future of college education. Will it still be worth it to be in debt during the first 10 to 15 years of your work life for a chance to earn more monthly income? Apparently, some colleges want you to think so.

Before we can throw stones at these heartless college institutions for continually raising tuition fees, you need to read the 2012 article from the Associated Press website.

According to the AP Big Story, there are some colleges who have heard the cries of the student population and are willing to provide them with a bit of reprieve. Some of them offer a tuition plan that will freeze their rates for 4 years. These fixed-rate tuition fees will allow families to budget for their student’s school expenses. Others went a step further to offer a lower fee for the school year 2012 to 2013. The total number of colleges who did this in the last school year involved 320 universities and colleges all over the country.

The main benefit of having a fixed tuition is the student gets to analyze and anticipate their overall college costs. By having a figure to target, they will know how much they need to raise to add to their savings. They should be able to decide whether they need to get a student loan or getting a part time job will help pay for the shortage.

The real cost of getting a higher education

Whether you are an incoming college student, coming back for another year or going to a graduate school, the first step to prepare financially is to understand what you are paying for. Do not just accept the amount that the school will give you. It is very important that you do not rely on the myths of college costs and you should scrutinize what you are paying for in school.

But what exactly is the real cost of going to college? More importantly, why does it cost a lot of money to get a higher education?

In 2011, Richard Vedder, a professor of economics in Ohio University and the director of the Center for College Affordability and Productivity released an article through the CNN website. Together with Matthew Denhart, the Center for College Affordability and Productivity administrative director, he discussed various issues that makes college very costly.

The article published through the provides the following insights about college costs.

  • The country’s higher education structure needs a reform to address the rising cost to go to school.

  • Colleges and universities lack the incentive to improve administrative processes to help lower their overhead cost.

  • A college or university president is viewed to be successful if they take care of the needs of the faculty, alumni, trustees and key administrators or politicians. This makes them prioritize earning more off the students through tuition fees than to make sure more students can enter the school.

  • Some of the Ivy League schools are trying to be “selective” to raise their status as providing the best education. They turn away qualified students so their elite status can allow them to raise their tuition fees.

  • Since the faculty is important to the education of the students, schools bribe them with high salaries and low teaching tasks.

  • The alumni that provide the school with some funds are appeased through intercollegiate athletic programs that bring pride and bragging rights for the school. These programs are oftentimes very expensive.

  • The presence of student loans do not help regulate the prices of the schools. Since students can borrow money anyway, there is no need to make schooling more affordable.

  • Students must learn how to measure their chances to earn profit against the tuition they are paying to get that privilege. It has to be measured in accordance with the industry their degree will fit into, the overall job market conditions and the rising cost of living.

  • A more transparent way of college spending must be enforced so schools will be more cautious of how they spend their money.

  • College tuition fees cannot rise faster than the income being offered by the corporate world.

These points help shed light to the many improvements that must be implemented to make college costs more affordable. Obviously, the need to get education is there. We just have to work on reforming the current system.

How to save a couple of hundred a month to help finance college expenses

While there is nothing that we can do at the moment to lower college costs for the next school year, the task is left to the students and their parents to make college more affordable. Here is a video from CNN where Christine Romans provide a helpful advice to keep student loan debt down.

You really have to take seriously the bad effects of student loan debt. You want to make sure that you save up enough money to help finance it. If you are still in high school or you have a child that is about to go to college, you can target to save a couple of hundred dollars every month to add to your college fund. $100 every month will help save you $1,200 a year. $200 will save you $2,400 and so on as so forth.

Here are some tips to help you save up for college costs.

  • Bundle your cellphone plan. Some companies will provide you with an all inclusive plan on your phone that will provide you with unlimited calls, text and even Internet access for only $40. This will save you $60 a month since usual cellphone fees amount to $100 a month. That can save you $720 a year.

  • Let go of your gym membership. The average cost of a membership is $10 a month. Although this is a small amount, it is still $120 a year. You can jog or use the community gym to get in shape.

  • Do your own nails. The average cost of a manicure and pedicure can amount to $25 to $30. If you get one every week, that can cost you $100 to $120 a month. If you learn to do your own nails, you can save up to $1,440 a year.

  • Be cautious about using a card for purchases (even debit or ATM cards). The average charge is $2.60. If you swipe your card once a day, you waste $18.20 a week. That is $72.80 a month. If you use cash instead, you can save up to $873.60 a year.

  • Get rid of the cable. A cable subscription can cost you $100 a month. That is $1,200 a year. If you have an Internet connection, just opt for this and let your cable go.

If you do all of these saving tips, you can slash $362.80 from your bill. That can total to $4,353.60 savings a year. If a parents starts to save for their childs tuition when they start high school, the 4 years before college can help them save up to $17,414.40 before they go to college. With the average student loan amounting to $24,000, you only have a few thousand to finance. The $7,000 can be something that the college student can earn by doing part time jobs.

Non-traditional Ways To Save Money On College

graduation cap on top of moneyIf you or one of your children is graduating from high school this year, you probably already know most of the traditional ways to save money such as buying textbooks on instead of the college’s or university’s book store and living off campus. There are other ways to save on college costs you might not have thought of. For example, your town or city might offer scholarships where there would fewer people competing for them. There are also scholarships available for specific types of students. As an example of this, where we live there are Chick Evans scholarships available to high school seniors who were caddies in high school.

Go online

There are websites where you can easily search for scholarships like FastWeb and NextStudent. All you need to do is type in your profile and either of these webs will do the searching for you.

Being undecided costs money

You’ll probably end up spending extra money if you start your freshman year undecided about your major. You or your child could actually save money by beginning school knowing what he or she wants to major in and then sticking with it. Switching majors just once can mean an extra semester in school and we don’t have to tell you what that would cost.

Do you have a friend or a twin?

If you have a friend searching for a college or university and you steer him or her to your school, you might earn a discount. Some schools offer a 2-for-1 deal if you and a twin or sibling who is close to you in age both go to the same college. As an example of this, George Washington University has such a plan in place. Be sure to check with your school to see if it offers such a plan.

Take college-level courses like you’re still in high school

If you take AP courses in high school, almost all colleges and universities will give you credit for them and these credits would be free. In some cases, you could get your entire freshman year out of the way before starting college – and at no cost. The following video explains more about taking college-level classes in high school and how this could help you get a head start on college.

Look for a … coupon?

One school in Chicago recently offered a 60% discount coupon via Groupon for an introduction teaching course. Who knows? Maybe this will catch on and more schools will offer discounts via merchants’ site like Groupon.

Start at a community collegemother, father and daughter

Perhaps the number one way to save money is by starting at a community college. This provides the opportunity to get your general education courses out of the way at a much lower cost than what they would be at a four-year college or university. The College Board has reported that the annual cost of a year at a community college is $2963. This is nearly one-third of the $8244 it typically costs at a four-year college. After a year or two, you could transfer those credits to a four-year college and save literally thousands of dollars.

Join the military

There are numerous programs where you could get financial support in exchange for a period of military service. If you are a degree-seeking student, there are scholarships available for veterans to ROTC cadets. And many of these scholarships come with benefits such as a monthly living allowance and money for textbooks.

Get a work-study job

These are part-time jobs funded by the federal government where how much your earn is dictated by your FAFSA. If you become eligible for one of these jobs, a school official will work with you to create a schedule that will fit your academic commitments. These jobs typically pay at least the federal minimum wage. There are also institutional work-study jobs offered by the individual schools. These are part-time, on-campus jobs that are not subsidized by the federal government and are open to anyone regardless of financial need.

Be an RA

RAs or Residential Assistants are responsible for everything in a college dorm from arbitrating disagreements between students or roommates to mentoring younger students. There is a lot of responsibility associated with this job but it does come with some very nice benefits. This can include free or reduced meal plans, free housing or tuition discounts.

Get an accelerated degree

Naturally, if you could get your degree in three years instead of four you would automatically lop about 25% off the cost of your education. How could you accelerate your degree? Depending on your major, you might be able to take some classes online, during the summer or as mini-semesters where there are fewer or shorter breaks. You might find that your college or university has a program where you could take courses on an under graduate level but that satisfy the requirements for graduate-level degrees. In this case, you would be able to earn a Masters degree much faster then normal.

Look for even more opportunities

If you keep your eyes open, you should be able to find other ways to earn extra cash. One example of this is the website that hands out weekly scholarships worth anywhere from $300-$1000 based on your participation in its discussion boards that pose questions on everything from personal beliefs to global issues. You might also find ways to earn money at your school by having a student leadership position or by being involved in research studies.

How To Keep Your Child From Student Debt Problems

Did you know that high school students are actually skipping college to avoid the dreaded student debt? USA Today published a report back in April 2013 about how younger generations think that a college education is no longer a guarantee to have a successful life. Instead of putting themselves through debt, they are aiming for a more simple dream through service related businesses like washing cars or something similar.

How To Keep Your Child From Student Debt ProblemsHaving seen how student debts are ruining the lives of several graduates, you are probably thinking about how you can save your child from the same predicament. You may even be paying off your own loans as you are reading this article. And your parents may still have these debt obligations. Try not to make it a 3 generation problem in your family. You can save your child from the burden of student debts with a bit of financial planning and smart preparations.

Costs that student loans cover

Student debt usually covers the tuition and fees alone while some people apply for a bigger amount to cover everything that will be spent while living on campus. But usually, people only consider the tuition fees, room and boarding expenses. But there is more to college costs that these. You have to consider this if you want to be completely prepared for all these and thus keep your child from having to put himself/herself in debt just to get a higher education.

Here are some of the things that will help you compute for a more comprehensive college cost estimate.

  • Academic related costs. These costs include the textbook and school supplies like notebooks, pencils, scissors, calculators, etc.

  • Basic necessities. These include clothing, shoes and other accessories that your child will need to appear presentable as they attend their classes and other college functions.

  • Electronic gadgets and devices. This includes computer/laptop, cellphone, printer, TV, DVD player, stereo and other devices that will help keep your child occupied when they are not in school.

  • Lodging needs. These include bed sheets, pillow cases, bath towels, laundry basket, bookcase, chair and other furnishings. It gets higher if the dorm or apartment where your child will live is not fully furnished.

  • Toiletries. These are bath/shower essentials, personal hygiene products, laundry and cleaning supplies, and other kitchen appliances (e.g. mini fridge, coffeemaker, etc).

  • Transportation costs. This will be higher if your child does not live within campus grounds or at least in the surrounding area.

  • Food. This will probably a big part of their expense as you do not want your child to skip meals just to make ends meet.

  • Cellphone and cable subscriptions. You want to be able to get in touch with your child regularly and the cable subscription will help keep them entertained at home. You may want to include these.

  • Health insurance. A health insurance will assure both you and your child of protection and finances in case of accident. Ease your stress by opting to get a health insurance.

  • Entertainment expenses. A teen will be a teen and they need to unwind just like everyone else. You want to help them keep the stress at a manageable level so make sure to budget for their entertainment.

How to prepare for college fees

Preparing for college fees involves saving and equipping your child with financial management skills. There are several online calculators that you can use to determine how much you will need to save up for college. and CNN Money  both have comprehensive college cost calculators. can also help you compute and estimate the costs you will face with your child when they reach college.

Here are important steps in helping you prepare for college fees.

Step 1: Get the most accurate estimate of college costs based on today’s rates.

Simply get an estimate from your preferred college. Discuss this with your teenager to narrow down the list of colleges that they want to go to. This is usually in the Financial Aid portion of the college/university website.

Step 2: Factor in the inflation rate.

Costs continue to rise and you want to make sure your calculations factor in the inflation rate. The usual rate is 4-6% every year. That means, a tuition of $20,000 for a private college education will cost $20,800 to $21,200 next year.

Step 3: Start coming up with a plan to grow your savings for college.

An excellent to make saving up for college easier is to save an adequate amount of money and invest it. Cut back on your expenses and see if you can make your child chip in. Have them work part time every summer or during school weekends. It is best to give them a taste of money management issues to help them develop the right financial skills like budgeting and saving. Pool all of these in and when you have reached your target amount, invest it.

Step 4: Choose the right investment.

When you want to invest your money. It is best not to put all your eggs in one basket when investing. That way, if one investment gets compromised, you still have other investments. Choose investments that has the same inflation rate as your college cost estimates.

Step 5: Monitor your college fund investments and keep on saving.

As you watch your investments grow, you need to continue saving as a backup financial plan for your teen’s college education. If they end up not using it, you can add it to your retirement.

The lynch pin in all of these preparations is your child’s ability to manage their own finances. Despite your aid in growing their money for college, make sure you make them responsible for these funds. In the end, you will both benefit because your child will be assured of the best education that you can afford and you don’t have to work your back off trying to finance what you child will need in a few year’s time.

The Astonishing Cost Of Your Baby’s College Education

You need a plan

Student loansIf you want that child to go to college, you need to have a plan. The first thing you will need to decide is how you intend to fund an education and how much you expect that him or her will contribute. There is one rule of thumb constantly quoted called the “one third rule.” This is where parents save for a third of the cost of their child’s college, while intending to pay another third cost from current income while their child is in college, which leaves one third that the child will be expected to pay through their own scholarships, loans or earnings.

A 529 plan

One of the things that you might consider is getting a 529 plan. These plans are incentivized savings plans specifically for paying the cost of college. There are several different types of 529 plans, so you might want to talk with a financial advisor to find out which one would best fit your strategy.

Other investments

If you believe a 529 plan isn’t right for you, you will need to choose other investments. However, don’t be overly optimistic in what you think the rate of return will be on those investments. One of our local entities got in big trouble because it had based its spending on a continuing rate of return on its investments of 8%. It’s almost impossible to get this kind of return unless you’re willing to do some risky investing. It would be better to count on an average return of around 4% over a 20-year period. You might do better than that but when it comes to investing, it’s always better to be conservative.

Find a CFP

If you don’t consider yourself to be an astute investor, don’t be afraid to ask for help. There are certified financial planners available that will consult with you regarding your investments in stocks, bonds or whatever. It’s best to choose a financial consultant who is a CFP (Certified Financial Planner). You need to find out in advance how you will be charged. Some financial planners charge by the hour, while others have a standardized fee structure. In either event, a financial planner can help you find the tools you’ll need to become a smart investor and how to map out your financial future. But before you sign up with a financial planner, do your homework. Make sure the person is honest and trustworthy. You might even ask for references. After all, you’re basically trusting your child’ s education to that person.

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