Ways of settling college tuition for students in the United States
The college tuition fees have adopted exponential trend, in terms of the annual increase. Over five decades, the college fee structure has increased by two percent per year. Statistics shows that total tuition fee for public colleges amount to more than $ 14, 000 while private colleges is estimated to be $ 38, 000. As a result, there is twenty to forty percent in tuition fee over the last two years in the United States. The increase is attributed to the economic downturns such as inflation. The majority of students accumulate massive debts at the four-year course of their college education, which hampers their payment methods. The study extrapolates on the methods that the college students are adopting in the settlement of tuition debts.
There is no clear-cut funding process of college education by the federal government. John, a graduate, state that increases in tuition fees creates challenges among students, in the line of settlement. Although there are grants and state funding based on merit-evaluation, John says, “The total cost of a four-year college education is extremely costly.” More so, John adds, “Statistically, I owed the state more than $ 24 000 by the end of a four-year program.” The aspect of joblessness and increased competition in the job market create barriers to student when paying back tuition fee. More so, the inclusion of interest on loans further complicates the payment process of tuition fee. Currently, the interest rate stands at five percent after graduation, which makes it hard for students to fill for loans. What is more, college students are given a ten-year period to repay total debts owed to the state. It is during that duration that students come up with vast methods of generating income. Most importantly, section of students pays their tuition debts while still in college through part-time jobs.
First, John states “The majority of students adopt a standard technique of paying tuition debts. The standard method under the federal government statutory laws states that students can access standardized-amount of money through loan. The loan is to be serviced within a period of ten-years after graduation.” The state adopts two forms of the funding process namely federal loans and private students’ loans. Studies state that the majority of students are funded by federal government. Most importantly, federal loans are processed as a form of students’ financial aid wit low interest rates. The federal government financial package incorporates grants, scholarships and part-time job opportunities among students. It is through adopting the federal government funding process that students manage to pay for the tuition fees. The federal loan helps in settling forty-five percent of total tuition fees. However, the increasing tuition fee structure forces the students to apply for the highest amount offered through loan. In an effort of settling full amount of tuition fees, sections of students engage in extra-economic activities that generate money. One such way is through a part-time job, which generates a significant amount of money. John highlights that the method is also known as income-based payment whereby students services thirty percent of the total tuition fees. John states, “The fact that I worked for less than five hours a day hindered maximum generation of income. More so, I experienced hardships in coping with college and the working environment.”
Secondly, tuition fees are paid through family income and private-student loans. In fact, the fee structure of private students is relatively higher than that of federal-funded students. More so, the interest rates of private-student loan stands at nine percent. As a result, such students combine family saving and private-student loan to settle the total amount of tuition fees. In many cases, the students opt to pay specified amount of money per month. More so, private students agree with the administration the monthly instalment of the total tuition fee to be paid monthly. On the other side, parents and students are scared of getting into debts through private and federal loans. The fact that the loan is unsubsidized and attracts a significant amount of interest rates prevents future economic development and establishments of students. Consequently, parents opt for using family saving and incomes to service tuition fees. John further says, “My parents serviced twenty-five percent while I settled thirty percent of the tuition fees from personal income. The rest amount of tuition fee I settled through borrowing.” Although such method of payment incorporates risks, sections of parents are willing to go the extra mile and borrow tuition fee from family members. Currently, forty-five of students settle their tuition fees through family incomes and borrowing.
Conclusively, the interview shows that students have adopted techniques such as loan, income-based, scholarships, grants and family income to pay for tuition fees. There is the combination of factors that dictate the mode of paying tuition fees. Factors such as economic status, social affiliations and total expenditure on tuition fees dictate the best mode of payment among students. Statistically, students are able to fund thirty percent of tuition fees through personal savings while parents contribute twenty-five percent. Overall, the federal government plays a significant role in the settlement of students’ fees.
