Student loans have been a hot topic in the financial news recently. With the rising costs of tuition and the prevalence of for-profit colleges, many graduates are finding themselves under a heap of debt with difficulties making their payments.
One CNBC article reported that the number of borrowers defaulting – or no longer making payments – on their loans doubled between 2003 and 2011.
Will things get better? It doesn’t look good. 40% of borrowers are expected to fall behind on their loans by 2023.
If you’re thinking about pursuing higher education, here are a few ways to help keep costs low.
Start your search in state
While university costs vary greatly by state and institution, in general, attending a college in your home state can save you thousands.
As reported in one U.S. News article, in-state tuition
and fees at public universities save students more than $12,000 compared with out-of-state rates for the 2017-2018 school year.
Think public institutions first
Along with selecting an in-state university, the next biggest savings for most students will likely come from choosing a public education over a private one.
Just how much could you save? Student Loan Hero crunched some numbers.
For the 2015-2016 school year, the average tuition for public university was $9,410 for in-state students and $23,893 for out-of-state residents. Compare that with private schools and the number gets even bigger; the average private school came in at $32,405.
That means if you attend a public university in your home state instead of private college, you could save over $91,000 over the course of a four-year education.
Consider future earnings
A college education is an investment in your future, so make sure you invest wisely. Not all career paths are created equal, so before you take out several loans, take a look at how much money you should reasonably expect to earn.
If your chosen career path is a difficult one in which to get an entry-level job and your earning potential is low, then you may want to consider choosing a college with lower tuition fees.
How different can earning potentials be? Forbes reports that top average earners with a bachelor’s degree make an average of about $62,000 for their first job, while kindergarten teachers can expect to earn about $35,000.
Start at the community college level
There’s no one path to earning your degree. If money is an obstacle, consider attending a community college, earning your associate’s degree, then moving onto a four-year university.
Personal finance blog Money Crashers reports the annual cost of tuition at community colleges is about $2,000 a year. That’s
a savings of over $7,000 a year!
Need budgeting help? We've got your back
Whether you need budgeting tools or an account to help you save faster, your local branch can help. Contact your neighborhood loan officer to get started.