If you are one of the millions of students who rely on student loans to fund your education, you might want to consider alternative methods soon. According to The coming student loan crunch by Liz Pulliam Weston, a student loan crunch is on it’s way. This is a sign of our economic state and a sign of the upcoming future of educational funding.
Students trying to get loans in the near future might run into:
- Higher loan costs.
- Fewer lenders, which could mean tens of thousands of college students scrambling at the last minute to find money.
- Tougher standards that could prevent some students from borrowing at all.
This is not good news if you are an upcoming student or plan to further your education in the near future. But, there are other methods of funding your education.
- Work out a payment plan with the college or university. Many colleges and universities have payment plans that you can sign up for that allow you to pay your tuition on a monthly, quarterly or semester basis. This can be a very manageable option if your tuition is not sky high.
- Use a low interest credit card.Federal loans generally have low interest rates but if you opt for a private loan, these rates are often higher than what you would see on a credit card and you will be overwhelmed with interest payments just like a high interest credit card. If you choose this option, make sure you read all the terms of the credit card and make sure you pick the right one for your situation. Once again, this option is probably best suited for lower tuition costs.
- Borrow money from a friend or family member. Just like a student loan agreement you can borrow money from friends or family and draft a re-payment agreement to make it a bit more formal. This can be a great option as family members will be more trusting that a bank if you are a responsible individual. This can also be a great way to learn money management skills.
- Start a business. If you are business savvy, you can start your own side business to put yourself through college. Many students now pay for their own education by creating Internet start-up companies that provide online revenue. There are a world of Internet related businesses you can start and many you can get off of the ground with very minimal cost. For example, if you are a web developer or designer, you could do side website projects to pay your tuition or you could create a website around one of your interests that place affiliate advertising on it to create revenue. The possibilities are endless.
- Join the work/study program at your college or university. This is a great option for paying college tuition and fees. You will work a set amount of hours per week or month and in return, all or part of your college expenses will be paid for.
- Break into that mutual fund or stock stash. Many college bound students have mutual funds or stocks that were given to them as gifts while growing up. It might be a wise investment to sell these off and take the cash to fund your education. Be sure to check if there are any early withdrawal penalties and also the tax implications.
There are many other options as well. You can also combine a few of these methods to create enough cash to pay for school. Just think out of the box and you might find your solution to pay for school without having to take out student loans.
