Helpful Tips on Managing College Finances From Cedar Ed Lending

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Cedar Ed Lending recommends students in need of financial subsidies be proactive and not rely totally on the Federal government to finance their college education.

It would be wise for students seeking a post-secondary education to view their college education in a new light and treat it as if it were a job.

Cedar Ed Lending recommends students in need of financial subsidies be proactive and not rely totally on the Federal government to finance their college education.
“The College Cost Reduction & Access Act of 2007 cut the interest rate on newly originated federal subsidized Stafford loans for undergraduates to 6.0% in 2008-2009 and ultimately to 3.4% in 2011-2012,” said Harvey Berkey, Cedar Education Lending COO.

“The reasons for reducing federal student loan interest rates to below market rates were laudable and the reduction has been extremely helpful to students, but the huge expense to the government subsidizing this program may prove to be unsustainable in light of government deficits. Students should not be complacent or assume these below market rates will continue forever.”

“It would be wise for students seeking a post-secondary education to view their college education in a new light and treat it as if it were a job,” Mr. Berkey continued. “If a person works hard and performs well, they can potentially increase their options and opportunities.”

The work begins when students make their initial decisions about which college to go to and what major to pursue. What is the impact of those decisions on the financing required? Cedar Ed recommends that students follow the plan outlined below:

1.    Be practical in selecting a major. Why spend four years or more and a ton of money on college only to find it is difficult to get work upon graduation. Over 50% of students pursue education or business related degrees, according to The 2010 Survey of Graduate Enrollment and Degrees conducted by the Council of Graduate Schools. These majors require expensive post-graduate degrees to maximize earnings. However, a majority of the jobs available today are in engineering, computer related sciences and health care.
2.    Be practical and shop around when selecting a college or university. Private, for-profit colleges cost a great deal more than public, non-profit ones. Colleges in certain areas of the country are more expensive than those in other areas. Often, lesser known and less expensive colleges offer a level of education in a student’s specific field of study comparable to better known, more costly schools.
3.    Start early in the year when seeking potential Federal Aid, State Aid, Grants and Scholarships. Grants and scholarships are offered by a surprising number of colleges, local and national businesses, foundations and others. Check the web but beware of marketing firms and their self-promotion. State Aid, grant and scholarship funds tend to dry up quickly and often make their awards before the spring so if a student doesn’t begin early, they could miss out on an opportunity.
4.    Work over the summer prior to and during college, or seek a paid internship to help defray college costs. A paid internship in the appropriate field of interest could also enhance a student’s ability to get a job upon graduation. In addition, the student could also seek a part-time job on campus to further defray expenses.
5.    Maximize Federal loans before seeking private loans. Federal loans are usually less expensive than private loans and carry more reasonable repayment terms. However, Federal loans are often insufficient to cover all a student’s costs and they might still need additional private loans. Cedar Education Lending and others can help qualified students seeking a Private Student Loan or a Private Student Loan Consolidation after graduation.

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Samantha Karageorge
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