Student Loan Dodgers

If you’re interested in science, technology, engineering or mathematics, your country needs you! According to the results of a 2005 study, more than one in five American college freshmen enrolls in a remedial mathematics course in college, and the proportion of degrees in science, math and engineering awarded to American students is dropping.

In contrast, students from other countries where math and science are emphasized in elementary and secondary schools, the proportion of students who go on to receive degrees in math and science is much higher. Additionally, the demand for skilled graduates in the sciences, engineering and mathematics fields is steady. Employers are increasingly forced to hire foreign workers to fill these positions because no fewer qualified American graduates are available.

Some colleges and universities are responding by redesigning their mathematics curriculum to appeal to American students and to improve their success in mathematics. One such campus, the University of Missouri- St. Louis, redesigned its college algebra program and has increased its student success rate without making the course less challenging.

As part of the redesign, the University’s introductory college algebra course was converted from a three-lecture-per-week format to a single lecture per week and two one-hour laboratory periods where students work on algebraic concepts, using math software designed to challenge and engage students. The software in the mathematics labs provides instant feedback so students know when they understand the concepts being presented. Over a three-year period, student success in the algebra course increased from about 55 percent to 75 percent.

Currently, middle school and secondary school mathematics teachers are in high demand. Some school districts are paying bonuses to recruit and retain qualified high school mathematics teachers, and those graduates who opt to teach in high-need areas are eligible for Federal student loan forgiveness. If you have an aptitude for mathematics, and can apply your skills in a science, engineering or mathematics field, you may find yourself in a career that provides multiple rewards.

Every year, students by the thousands look for funding opportunities for their educations. In some cases, opportunities to pay for education outright or receive reimbursements and credits go unused. When looking for college funding, don’t overlook these opportunities;

Employer programs: some employers offer tuition reimbursement plans to their employees and dependents. If you’re employed as a student, check with your employer to see if a tuition reimbursement benefit may apply to you. Likewise, some employers provide tuition reimbursement plans for dependents of their employees.

Loan forgiveness programs: generally speaking, it’s a bad idea to choose a major based on the availability of loan forgiveness programs, but if you’re considering a major that will lead to public service work, understand that there are several state and Federal loan forgiveness programs that may help reduce your student loan debt. These programs rely on you to fulfill a work commitment of a certain number of years, in some cases as much as ten years. You’ll also need to make regular student loan payments during the period of time you’re amassing your eligibility. If you’re not prepared to make the commitment to public service, you’re better off not seeking loan forgiveness under these programs. These programs generally don’t provide “partial credit” for public service work that falls short of the required time commitment.

Tuition reductions and waivers: Some state programs offer tuition reductions and waivers for certain students. For example, some states offer tuition waivers for Native American students, low-income students, and other students that meet certain guidelines. If you qualify for a waiver of some type, you should apply to take advantage of it.

Tax credits and tax deductions: College students, their parents and graduates may be eligible for certain types of tax credits and deductions related to higher education expenses. The government offers Hope and Lifelong Learning credits to qualified individuals, and tax deductions for qualified higher education expenses that are not otherwise reimbursed by an employer.

Scholarships and grants: the number of students seeking financial aid has increased substantially, and it is becoming more difficult to find scholarships that can help defray the cost of education. Visit your institution’s library to see if they maintain a section on scholarship resources for students. Research grant opportunities carefully and apply only for those you think you have the best shot at getting. Be diligent and persistent. Over time, you may find that you can lower your tuition bill substantially with several small grants each semester. You may not end up with a free ride, but anything that lowers your bottom line at no cost to you is a plus.

For some students, four years of a college education is simply too much to afford. Accelerating their college career can reduce the amount of time spent in the classroom, which reduces the overall cost of college. How do they do it?

For many students, the three-year journey through college starts in high school. High school students can accumulate college credits by taking and scoring well on Advanced Placement examinations. Generally, the cost of an AP exam is less than the cost of a college course, and for public school students, the cost of instruction is generally free.

Another way to accumulate college credits is to take courses online. Many colleges and universities are now offering online courses in both major subjects and to fulfill general education requirements. The advantage of online courses is that students can log on at convenient times to complete their work, and can take courses during the spring and summer semesters without having to be on campus.

For students who will be around, the Spring and Summer semesters present a great opportunity to grab a few extra classes at lower tuition rates. Spring-Summer classes usually take half of a semester to complete and offer the same number of credits toward graduation.

Some institutions offer compressed classes that can be completed in the space of one or two weeks. These intensive 40-hour per week classes are often offered to graduate students, but some undergrad programs also feature these high-intensity courses.

Another great opportunity to get college credits is to take classes at a local community college and transfer the credits back to your home institution. You’ll need to work with an academic advisor to make sure the credit transfers, but this can be a good way to clear out general education and foreign language requirements for a fraction of the cost of the same courses at the university.

If your child isn’t near college age, you still have time to plan for Junior’s post-secondary education. The Federal government has created savings vehicles that will help parents pay for college. The 529 and 530 accounts can be used to pay the cost of a college education and come with tax benefits not available with other savings vehicles. In addition, at least thirteen states offer pre-paid tuition contracts that enable parents to lock in the cost of tuition.

Parents worry that saving too much will mean that Junior won’t be eligible for financial aid. For need-based aid, that may be true, however the amount of need-based aid has been dropping steadily for the past decade or more.

With fewer need-based or income-based aid programs available, Junior is not likely to be eligible for need-based aid anyway, unless the family’s income meets strict low-income guidelines. Many parents make the mistake of thinking that the less they save, the more need they’ll be able to show when it comes time to fill out the Federal financial aid application. That’s not exactly true. Lack of savings doesn’t translate into “need” in most cases. The more likely outcome of reduced savings is increased student loans.

For example, Duke University reports that about 40% of its undergraduate students qualified for need-based aid in the 2004-05 school year. The median family income for qualifying students was $86,000. Adjusted for inflation, in 2007 dollars, that would be nearly $97,000. The university also reports that some students with high family incomes (in excess of $150,000 - $169,000 in 2007 dollars) received some need-based aid due to extenuating circumstances. Need-based aid is not limited to grants. It also includes certain types of loans.

The Federal student aid formula takes into account the cost of the institution, the income of the student, the income of the family, savings, awarded scholarships, the number of college-age students in the family, and family hardships such as long-term or catastrophic medical illness. Students with extremely low incomes – less than $40,000 ($45,000 in 2007 dollars) – were offered more grants and fewer loans. The point I’m making is that unless your family finances are minimally north of the poverty line, you’re much better off saving money in a college account of some type than you are hoping that you’ll receive grants.

The most important lesson here is that “need-based aid” doesn’t always mean “free money.” More often than not, it means subsidized Stafford Loans that must be repaid. In the long run, your student will leave college with fewer loans and a better opportunity to benefit sooner from his or her college education by using private funds saved in a 529 or 530 account, or by using a pre-paid tuition contract.