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  • July 11, 2014 - Reflections

    By Jean S. Horner
    The other day while walking down a corridor in a public building, I saw what appeared to be someone walking toward me. On coming closer, I found it was my own reflection in a huge mirror. For a moment it frightened me. Somehow a full-length reflection of one’s self is a startling thing. ...

Tackling College Debt

Simple steps lessen financial burden of higher education

By John W. Kennedy
Sept. 14, 2014

Jacqueline Rose has started her senior year at Southwestern Assemblies of God University in Waxahachie, Texas, and she hasn’t had to borrow a dime to pay for her four years of college instruction.

It’s not that her parents are super rich or unbelievably thrifty. In fact, Doug Rose, a truck driver who operates an irrigation business on the side, and Melisa Rose, a florist and cake baker, haven’t contributed any funds to diminish their daughter’s tuition. But they have allowed Jacqueline to live at home for free, and that has saved a bundle.

“They could have helped me pay for college, but my dad wanted me to be self-sufficient so I would value my education more,” Rose says. “I resented him at first, but in the long run I respect him for doing that.”

The self-sufficient Rose has obtained various scholarships and grants, bringing her average semester cost down to $1,500 — which she has paid on her own by working several jobs.

Rose says her parents always expected her to attend college as an avenue to a stable career. Initially she didn’t plan on staying in her hometown after graduating from high school, but she says it’s worked out for the best financially. Rose, a theater education major, plans to teach after obtaining her degree.

To help defray costs, Rose has received an annual academic scholastic grant because of good grades, plus a yearly leadership grant stemming from her volunteer involvement at the local church she attends. She has qualified for a drama scholarship from the theater department, and an additional one for representing the school as part of a traveling drama team called Dramatic Pause.

During her first year at SAGU, Rose gained scholarship funds by cheering in a Judah the Lion mascot suit at football, basketball and volleyball games. In her final year, her tuition bill is reduced because of a sibling grant: her younger sister, Elizabeth, is a first-year student at the school.

Rose likewise received a Tuition Equalization Grant through the state of Texas and a Pell grant via the Free Application for Federal Student Aid (FAFSA).

Filling out all the information for grants and scholarships only takes the equivalent of about a day a year, Rose says. She advises prospective college students to talk to financial counselors at high school or college.

“Opportunities are available, but most students don’t know about them,” Rose says. “You just have to look.”

According to Sallie Mae, grants and scholarships paid for 30 percent of college costs for the average family last year.

To raise money to pay for her schooling, Rose has been enrolled in a work-study program through which she is employed by the local public school district on weekends as well as during summers and on other class breaks. She also manages a coffeehouse at her local church on Sundays, works in the SAGU library, and has sold cosmetics.

Phil D. Drost, senior consultant with AG Financial Solutions in Springfield, Mo., says most students, especially those living on campus, must go into debt for a college education. The National Center for Education Statistics reports that 2014 graduates who borrowed to pay for education owe an average of $33,000 in student debt, an all-time high.

More than 70 percent of this year’s undergraduate degree recipients left school with student loans. Of the 37 million Americans who are currently paying off student debt, 5.4 million already have defaulted.

Even so, college graduates earn way more, are happier in their work, and are employed more often than peers without a degree. Earlier this year, Pew Research Center reported that adults ages 25-32 with a bachelor’s or advanced degree earn an average of $45,000 annually, nearly twice as much as those with only a high school diploma.

“Most experts consider college to be ‘good’ debt because you will go a lot further in earning capacity,” says Drost, who conducts church seminars on debt reduction. “Students need to look at it as an investment — and they need to make it a good investment.”

Nevertheless, Drost advises students not to borrow except for tuition, room and board, or books. He says loans for add-ons such as meal expenses unnecessarily extend the payback period. In addition, Drost recommends eradicating the loan as quickly as possible, rather than opting for low monthly payments that carry higher interest over time.

“Get into the workforce as fast as you can, then tackle the debt just like you tackled getting that degree,” Drost says.

Drost, who works extensively with congregations regarding stewardship, says some recent graduates are too focused on getting rid of school debt and neglect giving to church. He suggests they instead try to reduce discretionary spending in such areas as cellphone and TV cable bills. And he says young adults would be wise not to take on extra consumer payments such as auto financing and credit card debt in addition to their student loans.

“Don’t worry about getting a better car and more stuff, which doesn’t buy happiness,” Drost advises. “The key to wealth accumulation is to have little or no debt.”

Drost doesn’t recommend that parents try to foot the entire college bill for their children if it would jeopardize their finances.

“Mom and Dad need to take care of their future before they take care of their kids,” Drost says. “Mom and Dad may not have that many more years to accumulate wealth before retirement, but the 22-year-old college graduate has a lot of earning ability ahead.”

Jeff Francis, senior director of financial aid at SAGU, says there are three broad categories of assistance available: FAFSA, through which students receive Pell grants, student loans, work study, and other federal and possibly state financial aid; assistance from the school itself via grants and scholarships such as academic, athletic, leadership or other merit-based areas; and outside financial aid, including private scholarships from local organizations, a student’s church, or federal PLUS loans.

Francis says students may receive subsidized and unsubsidized loans through the FAFSA. Subsidized loans are need-based advances in which, unlike unsubsidized loans, the government pays the interest while the student is enrolled at least half-time. The amount of both types of loans depends on financial need, grade level, and whether the student is considered dependent or independent.

The FAFSA is most often the first and best option for receiving student loans, Francis says. Schools may also award a federal Perkins loan to students with financial need.

Francis advises students to try to save money on tuition by earning college transfer credit while still in high school through a dual credit program.

“I see students every day who don’t have the means on paper, but end up enrolling semester after semester, pay for school, and graduate and begin to work in a field in which God has called them,” Francis says. “Somehow a miracle came through for dozens of students who had no way to pay. We encourage students to make wise and educated decisions, but to also trust what they feel God is calling them to do.”

JOHN W. KENNEDY is news editor of the Pentecostal Evangel.


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