How Community College Lowers Student Loan Debt

by Chad Agrawal

debtIt is safe to say that colleges in America have turned into nothing more than big businesses. In the last few years colleges have raised tuition rates, which just happened to be during the worst recession this country has ever seen. Despite this, Americans are raised on the idea of college being the ticket to a better job and they are willing to risk going into debt in order to get that college degree.

The Numbers

In fact, the proof is in the numbers. In 2011, the total amount of student debt outstanding reached the $1 trillion mark. A lot of this was from something called “Student Credit Cards” that more banks started offering to college students. They basically give a student who uses their credit card points that can be redeemed towards purchasing items, like school books. This might help a little bit, but you have to remember that it is a credit card and not a debit card. This means you are borrowing money and paying interest on it. The rewards are a nice incentive, but the amount you will save with redemption points is less than the expense you’ll have paying off the interest.

More Value, Less Expensive

Students that want to save money should attend community college. This type of college always gets a bad rap and the stereotype is that only dumb kids go there. Nothing could be further from the truth. In fact, community colleges have the best deals on tuition when compared to universities. The average tuition for 1 year at a community college is $6,700. The tuition for 1 year at a university is $18,000 minimum. Plus, most community colleges hold the same regional accreditation as the universities. That makes their degrees just as valuable. And you can transfer from community college to Ivy League and Tier 1 schools. Therefore, students that want to save money and not go into big debt should consider applying at community colleges.

While in college, debt and expenses will rise quickly. Even if you work a job while in school it will never cover all your expenses. This is why in 2010 Congress passed the American Opportunity Tax Credit. This gives full time college students a credit of up to $2500 on their income tax returns. This is not just something that gives students a deduction on their tax returns but it also gives them a tax refund if they are eligible for it. The amount may not be substantial when using TaxFix, but every dollar counts during those expensive college years. What’s also great is that it doesn’t matter if you go to a university or a community college because any school that can obtain federal funding will offer these tax credits to their students.

Photo Credit

This post was written by Chad Agrawal

Chad Agrawal is the founder of CCTS, helping students transfer from community college to Ivy League, tier 1 or anywhere else by following this community college guide.

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