College

Whether you are entering college, considering an advanced degree or have kids getting ready to submit their college applications, there are so many different factors that should be considered in the process. Unfortunately, many of these questions aren’t typically top of mind or even considered ahead of time. Although it is no doubt a very exciting time to start this chapter as you advance your education, it is also a time to make important decisions and prepare yourself for the future.

Is college right for me?
With so many success stories about college-dropout millionaires or new invention breakthroughs, is investing in your education even the right choice? Well, consider these facts: a study from Georgetown University found that college graduates earn $1 million more in earnings over their lifetime than non-college graduates. Additionally, Pew Research Centers stated that the median yearly income gap between college graduates and high school graduates is around $17,500. Furthermore, the Bureau of Labor Statistics found that the unemployment rate for non-college graduates is three times higher compared to those who attended college.(1)

In addition to these numbers, by going to college you also make new friends, have networking opportunities and are plugged in to larger alumni organizations that can pay off over the long run.

How will I pay for college?
We all know that college costs a lot of money. Last year, on average, a private college cost around $45,000 and public college around $20,000.(2) That’s a pretty significant chunk of money to commit to education, but there are financial resources available to make it work. Here are 5 ways to help pay for it:

  • Scholarship through the School – there are so many different scholarships available; check with your school about where to find and apply for these.
  • Grants – awarded based on financial need, these loans are given out by colleges, states and the federal government and do not need to be repaid.
  • Work-Study Jobs – apply for a part-time job on or nearby campus, these jobs are given out depending on finances and funding available.
  • Private Scholarships – these are available from companies, nonprofits and community groups; you can search online or discuss with a counselor.
  • Take Out a Loan – loans are available and can be used to cover all or a portion of your tuition and college expenses.
  • ISU Credit Union has partnered with SallieMae® to offer student loan options as well

Remember, you can claim a $2,500 tax credit for the amount you pay for tuition and college expenses, so it can also be beneficial in the bigger picture. In addition to the above financial aid resources, you may also consider living off campus or at home, enrolling in community college, or getting a part or full-time job or internship. The bottom line is you don’t need to go at it alone; there are many different financial resources available to help support you in this important decision.

What will I study in college?
We’ve all been asked, “What do you want to be when you grow up?” That may have ranged from professional athlete, astronaut or doctor, but when you have that college application in front of you, it’s time to think through your options, your skills, your passion and what it takes to start your career. Although doctors and lawyers are known to have high earning potential, they also require much more time and money to go through school, take exams and get into practice. TV shows tend to glamorize some careers and if that’s your only impression of it, you may be in for a surprise. Here are some questions to think about before jumping into your career path:

  • What do I enjoy doing? What do I dislike doing? Are there any school subjects that I have more interest in than others? What do I tend to read or research in my free time? What skills do I have or what am I good at?
  • What is my personality like? You may consider taking personality quizzes or career tests online to get a gauge on how you score. Although this shouldn’t be used as a primary or sole decision tool, these resources are helpful to understand yourself and potentially consider new things.
  • What are the most popular majors right now? What majors or jobs have the most earning power and future growth outlook? What jobs are the most in demand?
  • What workload is required for a job in this field? Does it require extra school or exams? Are any licenses required? How will I get started in the field?
  • Where do I see myself in 5 years? 10 years? 30 years? Write it down and check back on how it has changed and how you are progressing toward your goals. Understanding your own priorities and goals is important to prepare and take the initial steps to pursing them.

Although there is a good chance you will change your mind about your major, it’s important to ask yourself these questions so you can get on track early.

How will I pay back my student loans?
Student loans are not uncommon. In fact, 44.2 million Americans have student loan debt (owing around $1.48 trillion). That’s about $620 billion more than U.S. credit card debt!(3) Although these numbers may look alarming, the point is that student loans are a popular and viable option if you’re investing in your education and your future. Plus there are many different repayment plans depending on your situation. Here’s a brief overview of federal student loan repayment options:

  • Standard Repayment: fixed monthly payments typically over a 10-year term
  • Graduated Repayment Plan: payments are lower at first and then increase (usually every 2 years) over a 10-year term
  • Extended Repayment Plan: fixed or graduated payments over a 25 year term
  • Revised Pay As You Earn Repayment Plan (REPAYE): monthly payments are 10% of discretionary income, recalculated annually, and loan is forgiven if not repaid over 20 years (25 years for graduate or professional study)
  • Pay As You Earn Repayment Plan (PAYE): monthly payments are 10% of discretionary income (maxed at what would be paid under 10-year standard repayment plan), recalculated annually, and loan is forgiven if not repaid over 20 years
  • Income Based Repayment Plan (IBR): monthly payments are either 10% or 15% of discretionary income (maxed at what would be paid under 10-year standard repayment plan), recalculated annually, and loan is forgiven if not repaid over 20 or 25 years
  • Income Contingent Repayment Plan (ICR): monthly payment will be whichever is less between 20% of discretionary income or fixed payment over 12 years, recalculated annually, and loan is forgiven if not repaid over 25 years
  • Income Sensitive Repayment Plan: monthly payment plan based on annual income across 15 years

Although there are various repayment options for different situations, owing money can be stressful. If you want this debt to go away faster, you may consider making more than the minimum payment, refinancing your loans or making a lump-sum payment when you have extra cash.

While there is a lot to think about when making that leap into your educational journey, the key is to prepare and equip yourself for the important decisions you will need to make along the way. Investing in yourself and your future will set you up for success now and down the road.


(1) https://www.cornerstone.edu/blogs/lifelong-learning-matters/post/do-college-grads-really-earn-more-than-high-school-grads
(2) http://money.cnn.com/2017/04/25/pf/college/pay-for-college/index.html
(3) https://studentloanhero.com/student-loan-debt-statistics/