Beating the rising cost of college

More and more college students are leaving campus with loads of debt, and the dollar amount is getting bigger. The average debt for the graduating class of 2011 was $26,600, according to CNN Money. In 2012, that number grew to $29,400.

At the same time debt is increasing, colleges all across the United States have continuously hiked tuition. So that leads to many questions: Is college worth it? Is there a better alternative?

Eyewitness News anchor Todd Kunz talked to students, parents, a financial aid director and even a university president to find the answers.

“Since I started school in 2009, the tuition has gone up 8 to 10 percent every year,” said Lena Pruitt.

“You have to come up with $2,800 just like that,” said a financial aid adviser at a college fair.

“It’s very easy for a student to get deeply in debt,” said James Martin, financial aid director at Idaho State University.

“Quite a bit, so not looking forward to that,” adds Pruitt.

Pruitt is going back to school for a second bachelor’s degree. She found the job market not enough to start payment on her now-due student loans.

“They wanted over $700 a month, and that’s more than my mortgage,” said Pruitt, talking about her loan payoff.

Jess Sanchez is in the same boat with a masters degree in education. The fifth-grade teacher finished with more than $90,000 in student loan debt. His first thought when he saw the bill?

“Crap (laughs). What did I do?” said Sanchez.

Are today’s high school students ready to tackle this?

“Uh, well, my parents have some money saved up for me and then I’m planning on getting a job and then the rest is hopefully going to come from a bank loan,” said Austin Peterson, a senior at Hillcrest High School in Ammon.

“Probably going to join the military and have them pay for it,” said Connor Ottley, a senior.

Are parents planning ahead? Craig Joseph’s daughter is only a sophomore.

“Scholarships, whether that be merit scholarships or leadership participation in high school. Those are the ways that we plan to pay for college,” said Joseph.

“I don’t plan to pay for it. I plan for her to pay for it through getting good grades in high school, working a part-time job, and doing her best to find the most economical way to pay for it. Scholarships are still probably the best way to pay for college,” said Tyler Watson, a father.

“Well, we are going to see what kinds of scholarships she can get, but for the most part, she’s probably going to be paying for her own college,” said Cheyanne Rasmussen, mother of a Hillcrest senior.

“I think students need to be careful with their academic planning,” said Martin.

James Martin is the director of financial aid at Idaho State University.

“They need to work on making sure they are progressing toward their degree in a timely fashion. One of the areas where costs really start to run up is when a student gets into their fifth and sixth year,” said Martin.

Martin said federal regulations require that a financial aid offer show the student the full amount he or she is eligible for. They cannot restrict the offer.

“That doesn’t mean the student has to take that, the full amount. I think students need to look very closely at the amount they’re borrowing and just as importantly, keep track. Four or five years and they have no idea how much they’ve borrowed and when I tell them how much they borrowed, they are completely shocked by it. It’s not free money,” said Martin.

“Well, nothing is free. Might be free to the student. Someone has to pay,” said Arthur Vailas.

Vailas is the president of Idaho State University. He’s responding to the proposal from President Obama to make two years of community college free to anyone.

“And it has to be a well-articulated plan that’s been scrutinized as to how that can be, not only paid for, but sustained,” said Vailas.

Vailas said a degree from a four-year institution will demand a higher salary later, whereas a certificate from a two-year school will pay sooner.

“I believe the cost of education today in most public schools, especially the Idaho schools, is a great deal,” said Vailas.

So what is driving up the cost of education? Just this past week, University of Wyoming trustees approved another 4 percent tuition increase. Administrators said half of the $2 million generated by the increase will go to faculty and staff compensation. Trustees adopted the policy last year of ongoing tuition increases of 4 percent a year. Still, some might argue that student loans are being granted and the money not actually used for education, but rather day-to-day living or once sought-after expenditures, with no accountability.

“That’s correct, Todd, and that is the issue. The issue is we need checks and balances on how students are not just qualified because of financial need, but there should be a kind of qualification of the kind of program that you’re going to enter in and there should be an accountability, an oversight, that you are achieving those goals and those expenses. That is not the case in financial aid,” said Vailas.

The best advice? Plan, and start yesterday. If you’ve missed out on time, there are ways to offset the cost of school, but be smart with your money.

“We hear it all the time, but I bet the answer is, ‘It’s never too early to start.” said Kunz

“It’s never too early. It’s never too early,” said Martin.

“I would tell a student, go to a place that you think you can get a great education, that you can afford, and sustain, and recover your expenditures at some point when you finish,” said Vailas.

Afford, sustain and recover… there is the key. Student loan debt has a ripple effect. One of the resulting problems that keeps popping up is, as students are trying to pay off their loans, this redirects money they could be using to save for retirement. According to a new study by Nerdwallet, the average student loan debt of nearly $30,000 can cost graduates nearly $700,000 in lost retirement savings over a 50-year period.

Here are the typical ways to pay for college: Pell grants, student loans, scholarships, the GI Bill, working through school and saving for it, and of course, mom and dad.

According to the College Board, the average tuition and fees for a single year at a two-year school is $3,336. The advantages are the lower cost upfront leads to less debt. You are usually working through school and this gives you a head start in the workforce. Plus, you often live at home when you attend a community college. The downfalls are you will lack the degree and therefore your salary will typically be less.

As for a four-year school, the average tuition and fees jumps to $9,145 for one year. The pros and cons are almost inverse. You will walk away with a degree, which will demand a higher salary. Typically there are some accolades depending on the degree and the school. This will attract a greater chance of being hired. On the con side, there is the cost upfront, which will lead to more debt to pay off. Plus, another two years of school will delay you jumping into your field and beginning your career.