College is expensive. With tuition going up by 70 percent or more in some parts of the country, even a public education seems to be slipping out of reach for a population whose earnings haven’t gone up at the same rate.
At the same time, a college degree is more important than ever for students seeking well-paying careers. The solution for a generation of students: taking out loans to pay for education, and entering into costly payment plans. But as tuitions continue to rise, many people are questioning that concept too. Just how much debt should a person take on? Is there another way to make college affordable?
There is another way, one that is quickly picking up steam: enrolling with affordable, accredited online institutions. Here’s why, and how, it can work for you.
How Student Debt Holds Us All Back
When we talk about student debt, we usually focus on the direct effect it has on individuals. A recent study by the Consumer Financial Protection Board found that college graduates with student debt obligations are taking longer to:
- Start a family
- Buy a home
- Build savings
- Own a business
- Plan for retirement
This sort of stagnation doesn’t just hurt you, however; it hurts the economy. Student debt now exceeds $1.2 trillion, more than all other forms of consumer debt except mortgages. With so many young professionals effectively frozen and unable to spend or save, economic recovery is impeded—particularly in the housing market.
Want to avoid getting trapped in this cycle? Until the bubble bursts, your best option is to take your education costs into your own hands.
Borrow a Little, Save a Lot
What’s the difference between borrowing $20,000 and borrowing $50,000? Say you borrow at 6 percent interest, and pay your loan back within five years. Your total cost for the smaller loan will be $23,200—meaning you pay an additional $3,200. For the larger loan, your total is $58,000—or $8,000 over the initial cost of the loan.
That’s a big difference—especially considering that you’ll be paying $1,000 per month just to stay current on the $50,000 loan. The absolute best way to avoid owing more than you can easily pay back: borrow less. It’s also your best option to start building a new life as soon as possible.
Reduce Before You Borrow
A loan will help you pay for tuition, but it doesn’t reduce your tuition costs. That part is up to you. Before you embark on your college education, it’s best to come up with a solid degree plan. In that plan, include some alternative options.
Low-cost online college courses are one of the best ways to drop your costs. StraighterLine also offers a full year of courses for just $1,299—a fraction of what you’d pay at almost any university. Those courses count for transfer credit, but save you the cost of taking basic courses at an expensive school.
Students who include StraighterLine in their degree plan can save over 60% on their overall cost of college. How much will that save you in loan payments? Do the math!