In these tough economic times, some households have had to put basic needs above plans for higher education, turning to personal savings and college funds to fight off foreclosure, meet mounting medical costs, and in some cases, even keep the lights on and food in the fridge. In the wake of the recent Recession, many commentators have begun to question the cost-benefit of analysis of spending for higher education versus the realities of the jobs (and salaries) earned as a result.
But according to a new Gallup/Sallie Mae study, despite tightening budgets and high unemployment, most students and their families are not cutting back on education. A large majority of people still strongly believe that college is an investment in the future.
So, how are Americans just like you financing a college education?
The authors of How America Pays For College 2010 asked a nationally representative sample of 801 students and 823 parents that very question. According to The Huffington Post’s look at the study, “To finance higher education in light of such financial restraints, students and families continued to use payment methods they had in the past, including drawing from savings and turning to friends and family.”
The six primary ways students and their families paid for educational pursuits in 2009-2010:
(1) Parent income & savings
Some 37 percent of American households paid for the ever-increasing costs of higher education using dear old mom and dad’s traditional “college fund.”
(2) Grants and scholarships
A lesser (but still substantial) portion of our country’s citizenry (23 percent) relied on grants and scholarships to subsidize their educational dreams—proving that athletics, academics, or all-around initiative truly can pay off.
(3) Student borrowing
About 14 percent of higher education in 2009-2010 was paid for by student loans—adding considerable debt loads to thousands of recent graduates who can now ill-afford to go without work for long.
(4) Parent borrowing
Borrowing cuts both ways, as parents attempt to supplement missing savings with their own loans to subsidize their child or children’s educational pursuits (10 percent).
(5) Student income and savings
Many students (9 percent) supplemented other educational payment methods by working jobs before (and during) college.
(6) Friends and relatives
To a lesser extent (7 percent), American families rely on friends and relatives to help shore up much-need money for mounting educational bills.
“Of some concern…is the number of people who reported paying tuition on credit, “ says HuffPost. “Credit.com, a site that provides information on credit cards, credit scorings and credit reporting, notes that Sallie Mae updated their study to find that 6 percent of families use credit cards to pay tuition.”
If you’re using credit cards to subsidize your child’s college education or even your own, you’re likely to learn a hard lesson: credit card interest rates are on the rise, and without assistance, thousands in tuition placed on plastic, can quickly snowball into a budgetary nightmare. However, unlike student loans which require “a substantial hardship” to be discharged in bankruptcy, credit card debts, even those charged for educational purposes, can most easily be dealt with in the debt dissolution solutions that a bankruptcy affords.
So, if you are one of a growing number of American men and women who have mounting credit card debts related to educational expenditures or otherwise, we know how to help. If you live in North Carolina and credit card debt has gotten you down, it’s important to understand that a qualified bankruptcy attorney can teach you the right ways to proceed on the path to a better financial future. In fact, the bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.