Student loan payments are not a career choice
Congratulations, graduates. You’ve completed a milestone. Welcome to the world of higher education and years of debt that come with it.
That’s not the message new college and grad students want to hear, but too often that’s their reality.
Fortunately, there are ways to reduce the prospect of lifelong student loan debt. John Lim, Alissa Carpenter and Winnie Sun offered suggestions that could benefit the current generation of students and many more to come.
Lim is an entrepreneur specializing in public speaking, high-impact presentations, online courses and digital products. Carpenter is a millennial workforce expert and consultant. Sun is one of the financial industry’s most sought-after professionals.
“I graduated from UCLA,” Sun said. “My fondest memories were the summers when I worked in the dorms. I met so many great students who came from all over the world to attend summer sessions. I met lots of people from all different cultures.”
Carpenter went to undergraduate school at Millersville University of Pennsylvania, graduate school at the University of Pittsburgh and worked at several schools, including Penn State and the University of Pennsylvania.
Lim’s fondest memory was having his parents attend all of his graduations. Those included undergraduate at the University of Pennsylvania, Georgetown Law and Johns Hopkins Carey Business School.
“The most valuable thing that came out of college was starting and finishing something, achieving my degree, and being in a location that afforded me tons of work opportunities,” Sun said.
Classes were good for Carpenter, but she put a premium on the people.
“My connections and network were valuable,” she said. “While classes and academic knowledge were helpful and often necessary, the people I met have become my mentors, biggest supporters and my accountability partners.”
Lim’s first push was academics.
“I bulked up on classes in undergrad to finish a semester early so I could work while applying to law school,” he said. “Business school came much later after more than a decade of work experience.
“Having that real-world experience was super important before grad school,” Lim said. “And the networking — especially in graduate school — was the best return on investment in and outside the classroom.”
Higher education is important because a lot of companies want applicants to hold college degrees as a consideration. The actual degree might be irrelevant to the job.
Sallie Mae — the nation’s saving, planning and paying for college company — found that 95 percent of students said an advanced degree is necessary to enter, advance, accelerate or remain competitive in their chosen career.
“I believe in higher education, and I believe equally in the importance of finding an internship or professional job in a field that interests you as soon as possible,” Sun said.
Carpenter also knows the value of sheepskin.
“It varies by industry, but a graduate degree or certification — CFA, CPA — can easily be the minimum qualification,” she said. “Competition is high. Many millennials went back to school during the recession when they couldn’t find a job.
“Undergrad was public relations, and grad was social and comparative analysis in education,” Carpenter said. “The people you meet in college — friends, professors, club sponsors — go way past your four years.”
A degree once flung open doors, but that’s not the case today.
“Back when I went to law school, a job was almost guaranteed,” Lim said. “Now it’s much harder. You have to put in the time and legwork to really stand out.
“It’s important to have realistic expectations of what a grad degree can and can’t do,” he said. “There is also so much can be learned outside of a degree — many more options today for higher learning than before.”
A big education consideration is ability to pay. Nobody wants to join the growing population shackled by endless student debt.
“As a financial advisor, I think you should really evaluate your goals and personal financial balance sheet before attending grad school,” Sun said. “What’s your passion? Is that grad degree necessary? Does it make sense for you? Would finding work make better sense?
“To help assess your financial situation when considering going to back school, you can use a budget worksheet to really put your finances into perspective and help keep you on track,” she said.
The Sun Group has an assortment of budget worksheets available online.
“I wouldn’t suggest going to school unless you know what degree you want, why you want it and what you plan to do with it post-graduation,” Carpenter said.
“Look at the average salary, what credentials are required for the job you want, and talk to people in the industry before committing,” she said.
The considerations ultimately come down to why.
“Finances — who will pay, especially if you work in a full-time job, will they accommodate the time and money?” Lim said. “Look at the time commitment, especially if you have job and family responsibilities.
“There’s the big why — why are you getting a grad degree?” he said. “Is it to advance a career or to hone a skill? It should be specific and goal-oriented.”
Graduate or any other students can’t have enough scholarships.
“Scholarships are hard to come by, but many schools offer graduate and teaching assistantships that pay for classes, give you a stipend and can include housing,” Carpenter said.
“It’s not ‘free’ money, but can provide you with great experience, connections and pay your bills,” she said.
Lim added that tapping into external resources such as grants and scholarships is more important than ever.
“I would definitely recommend listening and learning from Paul Curley,” Lim said. Curley is the director of college savings research at Strategic Insight and editor in chief of the “529 Dash” e-newsletter.
The most useful tip for scholarships is to apply yourself now and get decent grades. Some scholarships are based on financial need, but brains give you more options.
“Start early, embrace Google, and seek out scholarship specialists,” Sun said. “There are people who know this space really well.”
Lim said scholarship applicants need to know the process, rules and requirements.
“Some smart ways to pay for grad school would be to find scholarships, take on a campus job, work during your off-time, sell things online or do contract work on sites like Fiverr, and get a paid internship or side job,” Sun said.
“I’m a big believer in earning as you go,” she said. “It’s good for your debt and your future career to plan to earn early.”
There are both personal and corporate finance opportunities.
“Assistantships and fellowships are great ways to pay your bills and potentially get housing,” Carpenter said.
“If you’re currently working, many employers pay at least a portion of tuition,” she said. “Make sure you talk with Human Resources and your boss so you don’t miss out.”
While Lim endorsed scholarships, he said there are competitions — especially in business school — along with pitches and presentations.
“These can give you great practice for later on to pay for school,” he said. “For undergrads, there are work studies. Grad students can get teaching-assistant jobs.
“If pursuing a PhD, many fields are subsidized,” Lim said. “Finally, start a side gig. That’s easier than ever. A large number of students are coming in with some business experience, even at the undergrad level.”
The whole point is to avoid long-term financial distress.
“Debt-free life equals happy life,” Sun said. “Wouldn’t you want to be stress free from debt? I know I do.
“Think of where that money could be going,” she said “A new car, a relaxing vacation or even toward your retirement. Who knows? You may be able to retire early.”
She recommended the article, “Focus on this debt for a better retirement.”
“I would think there aren’t too many differences between how undergrads and grad students are paying for college,” Sun said. “You need to make money or find money to pay for school.”
Lim believes jobs are a defining difference.
“Many grad students may be going to school part time and working full-time jobs,” he said. “Also, if you’re getting an advanced degree for a job, your company may subsidize part of or even all of it.”
Among often overlooked ways to pay for grad school are the military services. Their programs will pay a large chunk of courses.
“One overlooked way to pay for grad school is the amount of work you can do from home on the side,” Sun said. “My friend, Marsha Collier, put her daughter through school by selling things on eBay. Get scrappy and make it a goal to get school paid off quickly.”
Carpenter suggested the public sector for support.
“Public-service loan forgiveness programs help in the long term,” she said. “This comes into play after you make 120 qualifying payments, fill out the necessary paperwork and work with qualifying employers — non-profit, not-for-profit or government organizations.”
Lim again cited competitions for pitches and presentations, and case studies — especially in grad school — as untapped resources.
“There’s also being part of the ‘recycle economy,’” he said. “In business-school, I sold all of my textbooks at the end of the semester on Amazon.
“Students also can start a side gig much easier today,” Lim said. “Today’s students have amazing skills to offer as part-time consultants or freelance on Fiverr or Upwork. There also are grant programs, particularly for specialized areas of study.”
Gauging return on investment is another challenge for graduate students.
“Your degree is only as valuable as you make it,” Sun said. “Invest in yourself early on. Practice social media for work. Look for internships and part-time jobs at companies in industries that interest you.
“Think of every decision as an investment in your future,” she said. “Take responsibility for your future. Get that student debt paid off as quickly as you can.”
Lim emphasized people connections.
“Make sure you take advantage of out-of-class networking opportunities, especially when a company CEO or executive is a guest speaker,” he said. “Often, your opportunities to build your network or career will come right outside the classroom.
“I also recommend — if you’re going part time and juggling a job — apply what you learn in each class to your job or vocation. Make it real for max ROI,” Lim said. “Attend those near-graduation workshops on paying off loans and making budgets. That’s super important and offered at all levels of education.”
Carpenter urged students not to go boldly blind into the unknown.
“Do your research before committing,” she said. “Look at salaries within your intended industry.
“Identify if you really need this degree for what you’re trying to accomplish,” Carpenter said. “Talk with people who have the jobs you want. Look at job descriptions for qualifications.”
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