Used to be, getting through the college admissions process was the big hurdle in a high school senior’s life. Now, even if a student is fortunate enough to be accepted to the college of his or her choice, with the rising costs of pursuing a higher education some families are having increasingly difficult times with financing.
“The biggest problem is the debt load,” said Stephen Dodd, president and chief executive officer of Tuition Management Systems of Newport. “People are increasing the loan debt they are taking each year.”
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According to Dodd, the average debt amount for undergrads has doubled in the last five years. Students overwhelmed by the debt they have accrued often take time off to work full time for money to pay for school, but actually might not be doing themselves any favors.
“When you do that, your chance of graduating drops from 66 percent to 16 percent,” he said.
To help students stay in school, Tuition Management Systems works with colleges, universities, private K-12 schools, and families to arrange payment options that are less financially overwhelming.
A counseling session establishes a student’s need. Taking into consideration the family’s (or student’s) current income and savings, a plan is devised so that the amount of debt a student must take on from loans is reduced, by arranging a monthly payment schedule for the balance of the cost of tuition. For example, for a $10,000 semester of college, a family could take a loan for $5,000 and pay the balance in 10 monthly installments of $500.
“The typical counseling session ends with a family borrowing 50 percent less than they thought they’d have to,” said Dodd. “We help them figure out how they can best utilize the assets they have.”
Tuition Management Systems (TMS) works with 175,000 families and 700 independent schools, colleges and universities around the country. Any student accepted to one of the institutions TMS works with, can obtain its services for a $50 yearly fee.
Similarly, College Planning Center of Rhode Island (located at Warwick Mall) offers advice to students and families on financing a college education. A division of the Rhode Island Student Loan Authority, the center can also assist with a host of other college-related needs.
Director David DuBlois calls the center “one-stop shopping. We’re almost an extended guidance office. We get a little more detailed than they can because we can focus strictly on issues that relate to education.”
All services at the center are free, and include college advising and assistance in completing admission and financial aid applications.
Financing higher education is one of the center’s most requested services, according to DuBlois.
“The cost of education is outpacing public grants,” he said. “The dollar value of the Pell Grant is maybe what the dollar was worth back in the 1980s. The purchasing power just isn’t that strong.”
The most common problem? Planning for the future.
“They are caught short,” he said. “Most of them don’t plan ahead. Start saving now. Even if it’s as little as $5 or $10 a week. It’s not going to hurt in the long term.”
Gayle Jendzejec is the president and managing partner of AB to Z Financial Services, LLC, in Coventry. AB to Z specializes in helping families – especially ones who qualify for little or no financial aid – prepare for financing a college education as well as retirement through workshops and personal consultations.
“How can the average person send their kids to college without going broke and spending all their retirement?” she said. “College shopping is like buying a car. The price in the college manual is like the sticker price.”
The key to this type of “shopping” is to help the student increase his or her marketability through good grades, high SAT and/or ACT scores, and a resume of achievements including community service. Jendzejec also suggested that students apply to six or eight colleges, even if they are primarily interested in one or two.
“Use the colleges for leverage,” she said. “If you have a marketable student, you can negotiate with a college. If they’re competing for a student, they up the ante. They increase their awards.”
Another tip is trying to minimize the length of time a student spends in school through AP (Advanced Placement) examinations and CLEP (College Level Examination Program) tests. According to Jendzejec, over 60 percent of college students are in school for five years or more; only 15 percent graduate in the traditional four.
“Shortening time spent in college will reduce the cost of college,” Jendzejec said. “A lot of kids can take up to a year and a half off (the time they spend in)school.”
