Financing a Degree in Tough Economic Times

Posted by Christine Shelly

financing a college degreeWhen I first joined Grantham College of Engineering, now Grantham University, almost 13 years ago, the median annual tuition rate to attend an in-state four-year college or university was about $3,200/year. Out-of-state college tuition, also at a public four-year university, was about $9,300/year. Now, just over a decade later, the median annual tuition in-state is about $8,500/year. Out of state tuition is out of sight at about $20,000/year. That’s a lot of money to fork over – or in most cases, a lot of money to finance. According to the US Consumer Financial Protection Board, at the end of first quarter 2012, outstanding student debt totaled an estimated $1 trillion.

Another area that has changed quite a bit over the past decade is the job market. The unemployment rate in 2003 was 6 percent. At the end of 2012, the unemployment rate was hovering at around 8.1 percent – for veterans, that rate for 18-24 year olds is just over 20 percent. Think about that for a moment: one in every five veterans ages 18-24 is unemployed. The total unemployment rate for all veterans over the age of 18 is 7 percent. In January of 2013, the US Bureau of Labor Statistics reported 1,328 mass layoff actions (more than 50 employees were laid off at once), involving more than 134,000 workers. With federal furloughs looming and a number of employers making or considering reductions in workforce, competition for good jobs is fierce.

This picture may seem bleak, especially if you’re a prospective student or the parent of a prospective student. It may appear that the prospect of graduating with significant student loan debt is more likely than the prospect of graduating and securing a well paying job. But there are a number of ways for students to earn a degree without taking on significant financial debt at the same time. It may be even more important now, during tough economic times, to ensure your student is competitive by having a solid educational foundation.

The nonprofit group College Board authored a study in 2010 that compared median hourly wages of high school graduates with college graduates over time. For example, in 1982, the median hourly wage for high school graduates was about 50% lower than that of college graduates. Twenty-six years later, college graduates made more than double what high school graduates earned. This study is very similar to one completed by the Federal Reserve Bank of St. Louis. In that study, the results demonstrated that each additional year of education completed beyond high school results in increased hourly wages between 8%-13%. So what does this mean? Recent high school graduates and recent college graduates might be competing for some of the same jobs today – but in ten years, the college grad will be more likely to have a higher salary.

So how do we make college education less of a financial burden and more of a wise investment? Start by getting the facts. If you’re interested in a path of study at a particular school, ask for a line item cost estimate. Schools – especially those who participate in Department of Defense tuition assistance, Yellow Ribbon and GI Bill programs – are required to fully disclose costs. College cost calculators, like the one provided by Grantham University, are very useful tools. The best way to be prepared and build a financial plan is to know the facts.

If you’re a working adult considering college, your current employer may have a tuition assistance program or offer grants or scholarship money that would help offset your costs. Letting your employer know that you plan to attend school on your own time, at least in some cases, can demonstrate commitment to the company’s ongoing success. This is true especially if you plan to obtain a degree that will help you progress in your current field. If you aren’t sure whether or not your employer offers tuition reimbursement or other financial assistance, check with your HR department.

Another good resource for uncovering funding sources is your city or county public library. These places are often repositories for all kinds of civic information, including lists of local businesses and organizations who contribute to local scholarship and charitable funds. You can also do a simple Internet search using the search terms “scholarship funds” and your city or state’s name. Just use caution – no reputable, legitimate scholarship fund is going to ask you for bank information, a deposit, or social security number in order to apply for a scholarship.

If you are a member of the US Armed Forces, then you may have earned military education benefits that you, your spouse or your children can apply toward an education program. There are a number of ways to reduce the cost of education: CLEP testing, applying military training and service toward college credit, Tuition Assistance and the Post 9/11 G.I. Bill are just a few. Veterans’ education benefits, by and large, expire ten years after leaving the service, so it’s worthwhile to explore your options sooner rather than later.

Finally, when looking at potential colleges, take a good look at online education offerings through accredited institutions. Many online programs offer quality courses, certificates and programs of study, just like those offered at more traditional state schools. But many online programs come without the traditional fees and overhead costs, so the bill you receive is typically much smaller than what you’ll find at brick-and-mortar institutions. Plus, you can attend class and study on your own schedule – rather than adjusting your world to school, school fits into your world.

Despite the current uncertain economic environment, an online education is a solid choice to bolster your future prospects. Education benefits — military, local, and federal — plus the high quality and reduced cost of online programs will allow you to make the most of all available resources.


Ms. Shelly has spent more than a decade working in higher education. She currently serves as executive vice president for Grantham Education Corporation. Ms. Shelly is passionate about changing lives – about making college education accessible and affordable to more people and preparing students and graduates for success.


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