Financing Basics

Build the foundation needed to navigate the community college financial aid system. Learn which schools are the most affordable, get money tips on reducing college costs, and explore the latest initiatives to make community colleges even more accessible.
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Student loan debt statistics continue to shock. Just two years ago, the average student loan debt in America was estimated at about $27,000. Now, a recent study from Fidelity Investments reveals that 70 percent of students who graduated college in 2013 borrowed money from various federal, state, and private sources to help pay for their education. And they left school with an average debt of $35,200. That's a 35 percent increase.

The Fidelity study also found that 50 percent of those 2013 graduates who had taken out student loans expressed surprise by just how much debt they had accumulated. That's another shocking statistic that clearly demonstrates just how difficult it is for many college-age students to visualize what their lives will be like when the borrowing phase of their student loans is over and the dreaded repayment phase begins. And that's not a good place to be.

The bottom line is that student loans are not optional arrangements between you and your lenders. They have to be repaid. They cannot be ignored or put off and federal law stipulates that they cannot even be discharged via bankruptcy. If you default on your student loans you can have your tax refunds intercepted, a portion of your wages garnished, judgments or lawsuits issued against you or collection fees added to your loan balances – not to mention harassing calls and tactics from aggressive creditors.

That's why it's absolutely critical that if you are a student loan borrower, you learn how to manage . . . read more

Education is one of the essential components to breaking the poverty cycle, according to studies. However, college completion rates for students from low-income households continue to be some of the most dismal rates nationwide. According to Spotlight on Poverty, just 34 percent of students from the lowest income bracket will even enroll in higher education. Of that number, only 11 percent will actually graduate with some sort of degree. Clearly, this is not the pathway to the American Dream that our country’s leaders have envisioned.

If college completion rates are critical to raising families out of poverty in the U.S., something must be done to ensure more students from poor families are able to finish their education. This is the goal of a new three-year initiative from the Center for Law and Social Policy (CLASP) and the American Association of Community Colleges, in cooperation with the Open Society Foundations, as well as the Ford, Lumina, Annie E. Casey and Kresge Foundations. The Foundation Center reports that the Benefits Access for College Completion initiative is up and ready to roll at seven community colleges across the country.
 
About the Benefits Access for College Completion Initiative
 
The Benefits Access for College Completion initiative is the latest coordination to improve college completion rates by targeting low-income students. According to the website for CLASP, this initiative is designed to point low-income students to the services that will provide the financial support they need to make it through the college years. The . . . read more

With tuition on the rise at community colleges across the country, many prospective college students today are on the lookout for the most affordable options in higher education. Fortunately, the U.S. Department of Education is ready to oblige the bargain hunters, with a list of the most affordable community colleges in the U.S.  Peruse the Department of Education’s list of deals to see if one of the schools is in your area.

The College of Affordability and Transparency Center
 
In an effort to bring affordability back to higher education, the Obama Administration has launched the College of Affordability and Transparency Center. This website offers a wealth of information about the cost of all types of higher education, with customized reports users can generate based on the information they wish to peruse. The center was created under the Higher Education Opportunity Act of 2008, according to a report at U.S. News and World Report. U.S. Education Secretary Arne Duncan explains that availability of information like this is critical for helping students find the most affordable solutions in a college education today.
 
“We want to arm students and parents with the information they need to make smart educational choices,” Duncan told U.S. News and World Report. “Students need to know up front how much college will actually cost them, instead of waiting to find out when the first student loan bill arrives. These lists are a major step forward in unraveling the mystery of higher education pricing.”
 
In addition to pricing on . . . read more

Community college has traditionally been seen as the affordable option to the four-year college or university, but rising tuition rates at community colleges across the country have made some prospective students fear that even these institutions are becoming too expensive. The good news is that there are many options for financing a college education, from work study programs to Pell grants. Take a look at these 10 tips for making a community college degree a more affordable option once again.

Scholarships
 
Many students heading to community college do not realize that scholarships may be available. This type of financial aid is one of the most desirable because it does not have to be paid back once the degree is earned. Typically, scholarships are tied to specific skills or achievements, such as academics or sports. They are also available for particular areas of study, especially in fields in need of highly trained workers. Scholarships are also offered based on financial need, race or other factors attributed to the underserved student population.
 
According to FinAid, many free databases are available to direct students to specific scholarships for which they might qualify. In some cases, students complete a profile, and the directory will match the students to specific scholarships that complement their skill set or interests. Students are then notified which scholarships met their specifications, so that they can pursue those opportunities.
 
Grants
 
Pell grants are equally attractive to scholarships because they do not have to be paid back after . . . read more

The face of the community college student appears to be changing in more ways than one, as a slow economy and skyrocketing tuition rates at four-year schools have begun to take their toll. A recent study by student loan provider Sallie Mae found that more students from high-income families are moving to community college right out of high school, thanks to lower tuition costs and better career options. It also seems that the attitude toward community college education is improving, as more students see this path as a viable option to a bright future.

The Changing Demographic
 
The report on the Sallie Mae website, titled, “How America Pays for College 2011,” explains that in the past four years, many families across the country and from all income brackets have shifted from four-year institutions to two-year community colleges. This shift could be a factor in why middle- and high-income families have been able to reduce education costs and take less money from income and savings to pay the price for higher education.
 
The study found that during the 2009-2010 academic year, 12 percent of high-income families (families making $100,000 or more) sent students to two-year colleges. The following school year, that percentage went up to 22 percent. That increase correlates with a drop in four-year college enrollment during the same time frame, which shifted from 56 percent during the 2009-2010 school year, to just 48 percent the following year. This group also reported paying 18 percent less . . . read more
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FINANCING BASICS