Other Ways to Pay for College Besides Loans and Scholarships

Most parents rely on loans and scholarships in order to manage their child’s education expenses. In reality, there are other options, but few people are aware of them. Therefore, this article can help to highlight some of the options that can be beneficial for you. It can be useful if you’re looking for options to pay off college debt without complicating your financial situation.

Here are some of the effective tips to pay off your college debt without relying on student loan or financial aid:

1. Stocks- Beneficial for your college savings portfolio: Tuition costs are incessantly increasing, faster than inflation. Therefore, stocks are considered to be the best way to save enough for the long term. You can start saving today to secure the educational future of your child. Therefore, parents can save money for a child who is approaching college age. You can effortlessly shelter your returns by switching your money into more bonds and cash. Once the bonds are matured, you can pay for college expenses with ease.

2. Section 529 Plans: Can be an effective solution to your problem:

Section 529 plans are popularly known as the Qualified Tuition Programs (QTP). This plan is considered to be the best option for saving for your children’s college education. You can effortlessly use your savings to pay off your educational loans without relying on additional loans or other financial aid programs. Prepaid tuition plans and college savings plans are two types of programs under section 529 plans. When you opt into prepaid tuition plans, you lock in future tuition rates at in-state public colleges at current prices. It’s usually guaranteed by the state. However, college savings plans are not rigid and do not offer a guarantee.

3. Savings Social Networking Programs: Social networking sites encourage friends as well as family to contribute to a child’s college education. Some programs are designed for the donor like updates on the child's academic progress. Therefore, the contribution of the donor can be used to encourage the student to get good grades and succeed in school.

4. College Savings Bank: The CollegeSure CD is an FDIC-insured certificate of deposit that is aimed for the purpose to manage college expenses. This certificate is offered by a college savings bank. The interest on this CollegeSure certificate of deposit is similar to other CDs. The interest percentage is fixed for average college costs at maturity. Once a CollegeSure CD has matured, the family can use the principal and accumulated interest to pay off college expenses.

5. Education Bond Program: Interest on certain savings bonds is tax free with the help of the Education Bond Program. Therefore, when you redeem bonds to manage higher education expenses, these savings are tax free.

Keep the above mentioned options when you’re planning to manage higher education expenses and want to use more than just loan and scholarship programs.  

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The State of For-Profit Colleges

For-profit colleges have been booming for the past several years. Many offer flexible online programs and opportunities for students who might not be able to gain admissions to non-profit and state schools. But is a for-profit college the best choice for students seeking higher education and career advancement? Recent developments suggest that the answer is no.

Struggling for Enrollment

Far from the earlier boom years, for-profit colleges are now struggling to maintain student enrollment amid allegations that they offer an inferior education and overcharge students. Many for-profit colleges are closing branches throughout the country. Even the manner in which these colleges are closing is contentious. In Connecticut, for example, several schools were closed at the end of 2012

after losing their accreditation. Regaining accreditation would have been a two-year process, and the students would not have been eligible for financial aid until the schools were re-accredited. However, the schools were still obligated to follow Connecticut law which included making provisions two months ahead of time so that students could make other plans. This was not done.

Burdened Students

Another way in which the tide has turned regarding for-profit colleges relates to the financial situation of students. Many either drop out, unable to complete courses, or graduate with staggering student loans and cannot find work. In July of 2012 a federal judge dismissed parts of a new set of regulations from the Obama administration that attempted to ensure that students of for-profit colleges did not end up in such dire straits. Nevertheless, portions of the regulation remained, and the judge acknowledged that there were problems with the schools that needed attention.

Projected Decline

Bloomberg News did a series of investigative reports several years ago on for-profit colleges and alleged that many such schools employed predatory practices against vulnerable populations including homeless people and veterans. Meanwhile, the corporations that own the colleges including Goldman Sachs and the Washington Post Co. are raking in billions. Currently, the stock value of for-profit colleges is in decline.

Changing Landscape

Just a few short years ago, traditional schools could not compete with the online offerings of for-profit colleges, but this is a landscape that is changing rapidly and brick-and-mortar colleges and universities are increasingly offering substantive online tracks. Some traditional colleges have even begun offering some free online courses for credit. All of this spells trouble for for-profit colleges that offered online flexibility as their biggest advantage over traditional schools.

Another issue and one reason students often have trouble securing jobs after graduation is that many for-profit schools simply have poor educational reputations. That isn't to say that there might not be talented and caring instructors at for-profit institutions or that no student will get a good education at one. But by and large, the perception of the colleges in both the business and the academic world is that they offer an inferior education.

Concluding Remarks

It is not impossible that a student could obtain both a good education and desired employment following graduation from a for-profit college. However, given the increase in online classes from community colleges, four-year institutions and universities and the increasingly uncertain future of for-profit schools, students would do well to investigate any for-profit schools they are considering carefully including whether the school has come under state or federal investigation, its accreditation status and the fate of its graduates. Students need to do independent research rather than relying on what the school tells them. In the end, though, the best choice is probably a traditional school whether the student takes classes online or in person.

Reginald Sallinsky is a freelance blogger and writer who focuses on education, professional development and training, the employment market and other kindred concerns. Online colleges, such as those online nursing schools and www.phlebotomytraining-classes.com, are likewise a subject of great contention in society, and a topic likely to be explored by Reginald in the future.

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