College Success by Cutting Costs
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The following is excerpted with permission from Charles Chadwick’s new book, Chadwick's College Checklist 2 Steps w/Tips on How To Cut College Cost, available from Amazon using the link on this page.
You have now completed Chadwick's College Checklist. Let us review the two steps with sub-pointers that may help someone minimize their college cost.
Step 1: Compare community college versus university cost.
Step 2: Student sacrifice time.
In some cases, people may have planned how to defray the cost or expense of a college education. Parents, especially, sometimes pay by setting up a 529 educational savings plan or a personal savings account, custodial account, home equity loan (putting their home up as collateral), or they tap into retirement plans by borrowing money from their 401-K. These are all ways to pay for a college education, but the information I have shared is based upon a student just making some personal choices that could cut costs.
This is not rocket science, but the idea of a person cutting college costs by having an open mind and being willing to make some personal sacrifices. Now, with any college expense, a scholarship can be a wonderful thing. Scholarships can assist with the cost and expenses, but ONLY for the student who receives them.
The next option for a student or parent is to pay out-of-pocket or go into debt by taking out a student loan. If you can afford to pay your own expense, that is one way to go. But, if you cannot afford it, like me when I was a student, then please think about my next statement. Everyone, please, "Use all of your resources to limit your college cost!" Now, I did eliminate some of my college costs, which I covered in this book, but I still had to take out some student loans. I’m now debt free of my student loan balance. I have 100% paid back in full the original $18,200 and any added interest. It felt good to have paid off my loans and move forward with my life.
Loans are not a bad thing when it comes down to a person's education, career, and future. Please view your student loan as an investment. Whenever one can limit their actual college cost, then they may limit or avoid debt. How would a person feel if they were paying back a student loan that they could have possibly reduced or even avoided? How will you now go about reducing your college cost? In May 2019, while working as a contractor in South Korea, I read a book that intrigued me titled, "FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle-Class Poorer," by Robert T. Kiyosaki. Robert is also the well-known author of the famous book, "Rich Dad, Poor Dad: What the Rich Teach Their Kids about Money That the Poor and Middle Class Do Not!" In his book FAKE, there was a passage that captured my attention and interest:
In 2012, student loan debt surpassed the $1 trillion mark, as well as credit card debt. As of 2018, federal student loan debt is the number one asset of the U.S. government. The way I see it, the United States went from subprime mortgages for poor people to subprime education for poor students. Subprime mortgages can be forgiven via bankruptcy. Most subprime education loans can never be forgiven. SOURCE: "Subprime Education." FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle-Class Poorer, by Robert T. Kiyosaki, Plata Publishing, 2019, pp. 153-153.
Do you agree with the passage that the number one asset for our U.S. government is student loan debt? There are two key sentences from this passage that intrigued me, and it may also intrigue you, “the number one asset of the U.S. government is federal student loan debt and that most subprime education loans can never be forgiven.”
Please look at the charts below. The charts are from an on-line article by Jill Mislinski. Please examine the charts on the next page for information purposes. The on-line article is titled "The Fed's Financial Accounts: What Is Uncle Sam's Largest Asset" by Jill, Mislinski, 06/12/20. Towards the end of the article, an interesting statement was made. Jill stated, "Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? It's about 44.8% of the total federal assets.
This is 10.8 times larger than the 4.2% for the total mortgages outstanding and 3.6 times the size of taxes receivable at 12.5%." Please examine the pie chart graph pictured and look at the comparison of all categories in relation to student loans.
From the pie chart, the biggest section is students loans that account for 44.8% of the federal government’s total assets. Below the pie graph is an inflation graph comparison. In the same article, Jill continued to reflect on the results from the inflation comparison graph. "During the decade of the 1990's, when real out-of-pocket funding declined 25%, tuition and fees rose 92%, which sounds substantial ... until you compare it to the 1399% across the complete data series. For early boomers paying for college was sort of like buying a car. But in recent decades, it has become more like buying a house, for which the strategy of a minimum down payment is commonplace for first-time buyers. The student loan bubble, the biggest slice in Uncle Sam's asset pie, will haunt us for many years to come."
Who has the answers? After viewing the graphs, I have provided, do you see just how much students' loans weigh in as an asset? Let me explain something; when a person takes out a loan for a car or house and defaults on the loan, the car/house can be repossessed. When a person defaults on their student loan, what can be repossessed? There is no hard-physical property, but what can be garnished is a person’s future wages. This is my opinion: a young person more than likely will be working a good proportion of their lifetime. Therefore, I would always advise them to keep their college cost down.
I had a funny uncle who once gave me a funny piece of advice that is true. He said, “Charles, you should never walk into a marriage blindfolded." I feel the same way when it comes to students' loans.
STUDENTS, PLEASE DON'T TAKE OUT A STUDENT LOAN BLINDFOLDED!
Just remember any student who received a loan usually will sign a master promissory note (MPN). An MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). I will leave you with some questions to think about. Student loans are indeed an asset for the government and if a student has signed an MPN can, should and why should their loan/debt be forgiven? Did anyone force a student into the major they chose to study? Lastly, what other asset would the government use to replace student loans if a bailout was given?
I feel that mankind should at least share information that can help others. This reminds me of a passage I heard when I was younger. I am not a deeply religious person, but I do have deep spiritual leanings. Luke, chapter 11 verse 33 (Aramaic Bible) says, "No man lights a lamp and sets it in a hidden place or under a bushel but over a lamp stand, that those who enter may see its light." I hope I have shed some light on how to cut costs while paying for a college education.
Sometimes, this world can appear to be a little challenging economically, even living in a nation like America. One thing about living in America is that there is always an OPPORTUNITY. Opportunities can be given, taken, or even created, but one must seek and look for them. The information I have shared contains a few opportunities that I took advantage of to cut my college cost and expenses while pursuing my degrees.
Charles A. Chadwick Jr. is a former college student, but more importantly, a friend who has shared with you, the reader, some steps to add or make your own checklist so you can achieve COLLEGE SUCCESS BY CUTTING COSTS."