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Paying for School is Tough These Days

Finding a way to pay for your college education has always been stressful. But this back-to-school season in particular seems to have students and parents frantically scrambling to secure the cash they’ll need when classes resume. Tuition fees are still increasing. Textbook prices are through the roof. Higher grocery prices are likely to strain a full-time student with no source of income (other than Mom and Dad). And this year, it’s harder than ever to secure a school loan.

The struggling economy has many Americans watching their pocketbooks, which means a huge drop in sales-tax revenue for the states. Unlike the federal government, which has the luxury of being able to run an enormous deficit, states have to balance their budgets—and they’re struggling like the rest of us. But rather than raise taxes in an attempt to recoup their lost tax revenue, states have opted for tuition hikes.

So you’ll just take out a larger loan to cover tuition, right? Not so fast. Thanks to the turmoil in the financial markets, many financial institutions are reducing their student loan offerings.

Fortunately, there is some relief on the horizon. Earlier this month, Congress passed a college-oversight bill, which mandates greater transparency in rising tuition costs. While this bill won’t necessarily mean a drop in tuition prices, it will at the very least put pressure on states to maintain their level of spending on public universities.

More promising still, Congress passed another a bill last week aimed at alleviating students’ financial woes. The Higher Education Opportunity Act sets forth specific requirements for textbook publishers. Now, thanks to government intervention, textbook companies will have to unbundle packages of textbooks and supplementary materials, making it possible for students to buy only those materials actually required for their courses.

As this Wall Street Journal article points out, you may be able to save even more on books if your required texts are published by one of the six major publishers (including Pearson and McGraw-Hill Education) who have begun offering electronic book alternatives to the hard copies. These “e-books” are less of a burden to lug around campus, and far less of a burden on your budget at just 50% of the cost of the traditional textbook.

Some graduate students have gotten even more creative at cutting their tuition costs. The Wall Street Journal recently reported that many law students have successfully negotiated with school deans to get more scholarship money, by using rival schools’ offers as leverage.

But if you’re not quite up to playing hardball with the dean, check out Jenn’s post on managing your personal finances when you head back to school, and post your own money saving tips below! And chime into our community conversation about student loans here.

–Vanessa Durante

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