9 Quick Tips for Maximizing Your College ROI
By June Puett, Extension Agent, Hamilton County UT Extension, and Campaign Coordinator, Tennessee Saves in Chattanooga
A college education can increase lifetime earnings up to $830,000 compared to a high school diploma. Even with the rising cost of college expenses, a higher education degree can be a good investment.
Try these tips to ensure that you’re maximizing your college education return on investment:
- Do your homework. Local community colleges provide big bang for the buck and tailor programs for local economy. Make sure there are jobs available in your area that match your field of study.
- Start early. Particularly when saving for young children, consider a 529 college savings program and benefit from tax incentives while building an interest bearing account.
- To find money to save, pay yourself. When a bill balance is paid in full, deposit that monthly payment into an education fund. A $300 monthly car or credit card payment, for instance, will build $3,600 in tuition savings in a year.
- Budget for costs beyond tuition. Expect to purchase dorm/apartment supplies (or avoid this by living with family), food, clothing, books, electronics, and miscellaneous school fees. Keep in mind that many college students eat out rather than prepare meals at home, which eats up a huge part of their spending plan.
- Go for free. Many states are offering free tuition for older students, veteran programs, and through work-study programs. Talk with student support personnel to find out your options and learn more about the qualifications.
- Lower your living standards. Ditch the cable for a $50 antenna for free TV (or $0 for no TV at all) and save more than $3,000 during the four years of college (based on an average $64 monthly cable bill). College students have little time to watch television anyhow. Keep living standards low after college as well; don’t spend all income furnishing a new home, buying new work clothes all at once, or purchasing a new car. Start saving for retirement with the first paycheck instead!
- Balance work and school. Don’t enhance stress by working more hours and devoting less time to educational priorities. Less sleep translates to lower school performance, possibly repeating courses or dropping out altogether.
- Invest your tuition dollars wisely. Government sponsored schools tend to have stricter student loan rules which can benefit the borrower in the long run. Most student loans are not forgiven in bankruptcy and colleges won’t readmit former students with unpaid loans. It’s difficult to get out of debt without a better paying job and better paying jobs may be unattainable without the college degree.
- Know your loan. Read AND understand any forms before you sign. Ask school financial aid counselors to explain documents and expectations for repayment as well as ramifications if you can’t locate a good paying job after graduation. Don’t borrow more than can pay back in a reasonable time frame.
June Puett motivates youth and adults to take charge of their financial future in her role as University of Tennessee Extension Agent. She provides leadership to the Tennessee Saves coalition in the Chattanooga region. Coalition partners have encouraged more than 27,500 local people to take the America Saves Pledge.