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CWR Building Wealth – $chool Daze

By Dwight Harshaw, BBA, Personal Finance Counselor

Dwight Harshaw, BBA

Dwight Harshaw, BBA

Every August thousands of college students prepare to go to school. One important aspect of their task is how to pay for it. My recommendation, pay with scholarships and cash. For many, that is easier said than done. If you are one of those who are financing your college education with loans or you’re thinking about it, here are some things to consider.

Search for scholarships, grants, and tuition reimbursement. The process of finding scholarships and grants should be done while one is in high school but it can be done at anytime. There are always scholarships, work study programs and grants available for continuing students. Make it a priority to find out what is offered at your school and apply. If you are already in the workforce, see if tuition reimbursement is offered by your employer. You will get the assistance you need to earn your degree and you will be a more valuable employee.

Work and save for school. Do it the old fashion way. Work and save, work and pay, as you go. In the long run that is better than borrowing to pay for school. It may take longer to graduate but once it is over, it’s over. You can then move on with your life.

Consider attending community colleges and state universities for lower fees.Government supported schools offer a quality education and are generally less costly than most private and for-profit schools. You should compare costs and maximize your education dollar, especially if you are borrowing to finance your education.

Don’t borrow a fortune for a degree that pays pennies. If the job or profession you’re training for pays an average annual salary of $40,000, don’t borrow $100,000 to get it. Keep a level head and borrow as little as possible to obtain your degree.

Avoid using credit cards. The number one way for college students to get sucked into the debt trap is through the use of credit cards. Don’t let this happen to you. Don’t use them, especially for paying for tuition and fees. The interest is too high.

Don’t borrow for personal living expenses. Personal expenses should be paid for out of pocket. If you don’t have money in your pocket, get a job.


Pay your loans off as soon as possible. After finishing school there is no reason to prolong the process of paying back the money you borrowed. When you accelerate the payback of your loan(s) you will pay less in interest expense.

Look for jobs that offer loan forgiveness as a benefit. This is an excellent way to eliminate student loan debt. It may require you to relocate and go into public service or the military for a period of time. And there is nothing wrong with that. It is a good thing for you and the entity that hires you.

Don’t co-sign for student loans. This message is for parents, lovers, relatives and friends. Do not co-sign for a student loan. The risk of you having to pay the loan back is too high. According to the Wall Street Journal, the latest data on federal student loans shows that students are defaulting at a rate of 13.8%. (February 4, 2011)

Speaking of default, what happens if you don’t pay back your loan(s)? The IRS can seize your tax refund, you can suffer garnishment, some of your social security can be taken away and you can be sued. Also student loans aren’t bankrupt-able. Many people that use student loans find themselves in debtor’s hell after finishing or dropping out of college. The only way to get rid of student loans is to pay them off. If you can avoid borrowing, you’ll be better off. If not, borrow as little as possible, and pay them back ASAP!

About Dwight Harshaw:  Dwight Harshaw is a personal finance counselor and writer. He is also a Realtor with Access Realty, Inc. in Little Rock, Arkansas. He has a BBA from the University of Arkansas at Little Rock in Finance with emphasis on financial planning.

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