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Keep College Debt Manageable

According to The College Board, the 2011-12 tuition and fees for California public four-year institutions rose 21%, the highest in the nation.*

While college graduates continue to out-earn those with only a high school diploma, the estimated $31,200 annual bill at University of California campuses ($22,577 at California State University schools) for in-state residents** has led more and more families to ask – is college worth the cost?

The answer is often still yes. Statistics show that the benefits of higher education remain significant – lower unemployment rates, better chance of having health insurance and job satisfaction, and higher lifetime earnings (nearly $20,000 per year higher according to the U.S. Census Bureau). But students and their parents must use caution when taking on college debt. 

  • Calculate how much a degree will cost based on current costs, inflation and your child's age. Compare that to how much a school's graduates can expect to earn (PayScale.com keeps a list of "colleges worth your investment") and the amount of debt the average student graduates with (Kiplinger.com's list of "best college values" can help). 
  • Keep in mind that a field of study with typically low earnings and limited job prospects may warrant a smaller investment. 
  • Look for aid. The federal government awarded $132 billion in grants, work-study funds and low-interest loans in the 2010-2011 school year, and the average student received $12,400 to help pay for college.*** Complete the Free Application for Federal Student Aid (FAFSA) and ask school counselors and financial aid staff for help to ensure you take full advantage of the financing options.
  • Consider private schools. The average cost for California independent colleges for the 2011-2012 school year is $45,147, according to CaliforniaColleges.edu. Private institutions may offer bigger financial aid packages that may result in costs more in line with public schools. In addition, some small private colleges are offering four-year degree guarantees. With these guarantees, as long as a student meets with and follows the advice of a school counselor and keeps up with academic work, the school guarantees he or she will graduate in four years.+ With about half of today's students taking at least five years to graduate, saving a year of tuition, fees, room and board can be significant.

Save Rather Than Borrow
 
Saving for higher education – whether you start when a child is in diapers or drivers' ed – may be the best way to avoid or minimize college debt. Learn more about college savings plans here.
 
* Source: The College Board, www.collegeboard.org.
 
** Source: CaliforniaColleges.edu. Costs are estimates for fees, tuition, books, supplies, room and board, and miscellaneous expenses for the 2011-12 school year at CSU and UC schools. The costs at each school in the system may vary.
 
*** Source: The College Board,
www.collegeboard.org.
 
+ Source: "The Rise of the Five-Year Four-Year Degree," New York Times, May 20, 2011.
 
Websites not belonging to this organization are provided for information only. No endorsement is implied.

 
Related Links 
 
How to Choose a 529 College Savings Plan
Are There Better Options Than a 529 Plan?
College Vs. Retirement: Which Is More Important? 
File for Financial Aid ASAP
Unique Ways to Pay for College
CTA Federal Student Loan Forgiveness Video
Guide to Federal Student Loan Forgiveness Programs (NEW)
CTA Student Loan Forgiveness Resources Page

NEA® Smart Option Student Loan® by Sallie Mae®

Now you have a smart way to pay for college—the NEA Smart Option Student Loan by Sallie Mae. This is an ideal solution to help pay for undergraduate or graduate college expenses not covered by scholarships or federal loans.

The NEA Smart Option Student Loan provides these benefits for degree-granting institutions:

LOW RATES

  • Borrow up to 100% of your school-certified education costs (minimum $1,000) with low rates from 2.25% APR to 9.37% APR5
  • NEA Exclusive Rate Reduction—Reduce your interest rate by a quarter percentage point after making 12 consecutive on-time payments1
  • No origination fees5 or prepayment penalties

FLEXIBLE REPAYMENT OPTIONS

  • Defer your payments until after graduation or choose an in-school repayment option that best fits your needs4

OTHER BENEFITS

  • Get a 2% Smart Reward® in your Upromise® account when you make scheduled monthly payments on time while in school6 (Not available with the Deferred Repayment Option)
  • Receive a quarter percentage point interest rate reduction when you enroll in the automatic debit program7

Call 1-866-898-5198 or apply online. You can get a loan decision in as little as 15 minutes.

1-7 For more important information on the rate, fees and other conditions of this program, see the Terms and Conditions.