Today is #FinHealthMatters Day! I’m excited to participate in a contest sponsored by CFSI and FinCon18 focusing on student financial health, so let’s talk COLLEGE!
As I thought about higher education and how many students graduate bogged down with debt, I realized I had a lot of strong ideas about getting a cost-effective education. In my own experience, a college degree is a piece of paper (or even just a line on a resume, given my own “piece of paper” was lost in a house fire 6 months after I graduated!) that gets you in the door of your first full-time job. A degree is a non-negotiable minimum requirement for most professional jobs, but the university name or field of study doesn’t matter in most cases once you have actual work experience on your resume.
This experience and your professional network will carry more weight as time passes. That’s a good thing since most people do not end up working in their exact field of study. When you think about it, it’s ridiculous to expect an 18-year-old to know what they want to do for the rest of his or her life! Much less pay tens of thousands of dollars for an education to prepare for that specific career path. I was a very driven high school student and chose a major before entering college, graduated with that same major and spent a whopping 4 years in that career.
However, that journey led me to the company I’ve been at for over 7 years (a long time for a millennial) and the experience helped me take on 3 different roles in that company that are only vaguely related to my college education. By my senior year of college, I realized that my best education came from on-the-job experience, in the form of internships. I couldn’t wait to graduate, start working in the field, learn what my career was really all about…and of course make money!
So, if it really all boils down to getting a piece of paper that will get your foot in the door, what are some cost-effective ways to go about that?
1. Take Advanced Placement classes in high school.
I rolled with an academically-motivated crowd in a very competitive high school. Everyone was taking a full course load of AP classes senior year. The great thing about these classes is that at the end of the year, you take a test which can get you college credit! I entered freshman year with 15 credits (basically equivalent to a semester) under my belt. Not only did they help me graduate on time, but I didn’t have to suffer through the massive impersonal lectures of Chemistry 101!
2. Choose the right educational institution.
People can get pretty snobby about college reputations. I remember relating to Rory on the Gilmore Girls because I had a dream to go to Harvard, but I decided on a major that the hallowed ivy didn’t even offer! (Trust me, that was an awkward admissions interview) My parents said I could go anywhere, and they would make it work – a popular mindset of many awesome parents out there – but they definitely breathed a sigh of relief when my Harvard dream was replaced by a sensible public state university reality.
I do believe the college experience is about more than just a piece of paper – it’s also about learning how to live on your own. But you don’t have to live across the country to get that experience. An hour commute on the New Jersey turnpike will keep any helicopter parents at bay. While I’m thankful that my parents were willing to make my college dreams come true, I’m glad I came to my senses. I’m now very excited to teach my son about the virtues of state schools close to home.
3. Consider county or community colleges.
Now, I did just say that I believe college is about living away from home but community college can be a great option depending on your situation. If your grades aren’t great or you don’t have any idea what major to pursue, why not knock out some basic courses at a county college for a fraction of the cost? My husband went this route because he received a scholarship that provided full tuition for the local county college and then he was able to transfer to a 4-year institution to receive his Bachelor’s degree.
Community college is also great if you know you’re pursuing an occupation that requires graduate level study (doctors, lawyers, veterinarians, etc). In that case, the goal is to complete your undergraduate degree as cheaply as possible since you know you will have to pay for several more years of schooling. You may even just want to think about taking a few 101 classes at your county college over the summer and transfer them to your 4-year institution so you can pay less per credit and graduate in less time.
4. Commute from home.
If cost is really paramount, then living at home and commuting to school can slash your college costs in half! Even if you spend your first few years on campus, it may make sense in junior or senior year to commute and save on room and board.
5. Apply for all the scholarships.
Fill out the FAFSA. Become a National Merit Scholar. Find out what your state and prospective schools offer. Scholarships are often a big motivator when choosing a school and starting freshman year, but make sure you keep pursuing them year after year. In many cases, as you are more engrossed in your major, there will be scholarships particularly for students in that field. I applied for and won a scholarship for food science students with a passion for the arts. What a crazy combination…that was right up my alley! You never know what’s out there!
6. Be an intern.
I can’t say enough how important work experience is while you’re pursuing education. Internships are extended interviews for a lot of companies. My summer internship turned into a full-time job offer before I had even graduated. I was able to thoroughly enjoy my senior year knowing I had a job waiting for me! I know not everyone can be this lucky, but having experience on your resume is everything, so it doesn’t matter if the internship is paid or unpaid. Employers want to see that you can do the job, not just study and take tests. Plus, you can grow your valuable network of people that can offer opportunities in the future.
7. Be in charge, take the initiative, and make a plan.
In my sophomore year, I had a tentative plan to take the fall semester of my senior year off to pursue an internship. However, my major’s department was small and classes were only offered once a year so if I didn’t plan ahead, I’d be staying an extra semester just to complete these classes. I took the initiative to work with my professors and get prerequisites overridden so I could take these critical classes a year EARLY and still be on track to graduate in 4 years. My main scholarship also required that I be registered full-time every semester to maintain my funds, so I had to work with multiple departments to get 12 credits for the internship I was completing (of course it made no sense to me that I was paying to “attend” the school that I wasn’t actually attending the entire semester, but you do what you gotta do). Don’t miss deadlines, don’t lose sight of critical details, be your own advocate. These important life lessons will serve you in the real world, not just in college!
8. Know the rule of thumb regarding student loans.
At the end of your education, make sure that you do not owe more in student loans than you expect to earn in your first year of starting salary. I heard this wisdom years ago from Suze Orman and it makes sense. If you plan to work for a non-profit or in the public sector, you’re probably not going to earn big bucks, so it doesn’t make sense to go to an Ivy and incur a hundred thousand dollars of debt. On the other hand, if you plan to become a doctor or a lawyer, making six figures, then you will probably be better equipped to pay back heftier loans.
Of course, I firmly believe you should do what makes you happy and if you’re smart about money, you will achieve financial independence no matter how much you earn. I just want to make sure you’re very cautious and conservative with student loans. When you graduate, you should be filled with optimism and opportunity for all the great things in store for you, not despair and regret buried under a pile of debt!
9. Let your employer foot the bill for grad school.
Some students choose to enter graduate school as soon as they complete their undergraduate degree. In some fields, this is a necessity. However, in a lot of industries, a graduate degree can make it harder for you to secure your first job. You will be seen as “expensive” and, remember, experience counts for more than education in many cases. I highly encourage you to secure that entry level job at a company that offers tuition reimbursement. After a year or so, you can pursue grad school on a part-time basis and get a free degree! Tuition reimbursement may also be an option for an undergraduate degree as well!
10. Plan for the future.
You may think I’m crazy for suggesting you consider retirement during your college years, but it is one of the smartest things you can do! The earlier you can start contributing towards your retirement fund, the less you’ll have to contribute over time and the sooner you’ll be able to leave the workforce. Don’t waste these precious years of compound interest! I am so thankful that my dad started a Roth IRA for me when I was 17. He taught me to diligently contribute to it through my college years based on my meager part-time earnings. Having developed that habit, it was a no-brainer to contribute the maximum annual amount once I had my first full time job – and every year since! Many years later, I have a sizable nest egg that continues to grow.
Financing higher education can be a huge undertaking with a lot to consider. My hope is that students and parents have real and practical conversations about the topic and make the decision that is right for them. Students, listen to your parents even though it feels like they’re nagging you. They have your best interest at heart. Parents, don’t shelter your children from financial concerns and discussions. Be open and teach them that #FinHealthMatters!