New York, NY (PRWEB) March 31, 2012
One thing is certain; expenses associated with a college education will continue to increase over the near-term. Students and families faced an average 7.9 percent jump for in-state tuition at public four-year colleges while private universities and community colleges saw tuition increases of 4.5 and 6 percent respectively over the past year, according to a recent report from the College Board. Cedar Education Lending recommends students take the following steps to help minimize the costs of attendance while at college and after graduation:
1) Consider looking for a 3 year program. Some colleges and universities are granting bachelor's degrees that can be completed in three years instead of four -- saving students an estimated $28,500 in tuition costs and giving them a year's head start in the work force. Others guarantee that student will get their degree in four years.
2) Consider colleges that are offering a "Four-Year Graduation Guarantee" program. Under the program, the school guarantees that students who meet certain requirements, like maintaining a GPA of 2.0 or higher, will graduate in four years. If not, the college will “pay” for the extra time.
3) Students who know they would like to pursue a joint-degree program should look for a college that will allow them to earn both a bachelor's and master's degree in four years. Simmons College in Boston is offering joint-degrees in areas including social work and public policy, while Wilson College in Pennsylvania is launching a program that lets students graduate with both a bachelor's and master's degree in humanities.
4) Maximize federal student loans first before turning to private student loans. Besides the benefit of a fixed interest rate, federal loans offer certain benefits not entirely available with private student loans. Recent graduates who find themselves unemployed and those facing economic hardship can apply for deferments of up to three years for federal student loans. Graduates can also request forbearance, which gives them more time to pay or allows them to reduce their monthly obligation. Also, under the income-based repayment program, borrowers often have to pay less than 10% of their total income. Their debt might also be forgiven after 25 years, or 10 years if they work in public service.
5) Shop around for private student loans. Some lenders do provide a fixed rate loan, but many more offer variable rates with certain borrower benefits, including a co-signer release, interest rate reduction after a certain amount of on-time payments and zero origination fees.
6) After graduation, consolidate your student loans. While most graduates take advantage of the federal student loan consolidation program, many fail to consolidate their private student loans. How much money will a graduate save with a private student loan consolidation? Let's assume that a borrower has $50,000 in private student loans with an average interest rate of 12 percent. With a 15-year loan, the borrower would ultimately pay more than $108,000 and the monthly payments would be $600. With a consolidation loan, a qualifying borrower can get a new loan with an interest rate of 4.75%, reducing the borrower's total responsibility to $70,000 and monthly payments to $389.
Remember, no matter what stage you are at, there are many ways to reduce your education related expenses and plan for a brighter financial future.