McKinstry: Smart college choice can cut debt

When Meghan Droge was a freshman at Fairleigh Dickinson University in New Jersey, she started paying $200 a month just to cover interest on her student loan.

Though daunting at first, the early payments helped keep the roughly $40,000 yearly tuition tab under control. So did some scholarship money and a resident assistant job that the English major from Long Island picked up along the way.

"It was huge not to have all that weight," Droge said, glad to avoid interest accruing out of control for four years.

She's unusual in that now, at 24, her student loans are history.

"I'm a step ahead," she says.

But the practical financial lesson is one that has stuck. Droge is attending graduate school at Iona College in New Rochelle and not taking on any student debt: She's pursuing a master's in public relations and landed a job in the school's communications office. Because the job is with the school, she receives a nice tuition perk.

Even though she works long hours, attends classes two nights a week and commutes from Merrick to New Rochelle, she can save for a car, home or vacation -- which she will no doubt need when she's done with school in another year.

Like the 52-year-old janitor who cleaned up at Columbia University, by scrubbing toilets and cleaning the student center while he was earning a degree, some people are clever about paying for credits.

Because college tuition is growing at such a jaw-dropping rate -- far faster than inflation -- more and more students and parents are getting schooled in school financing.

Debt, as so many are learning the hard way, can stick around like a nosey neighbor -- far longer than it's welcome.

And while the congressional gridlock over keeping the federally subsidized loans low just seems like another example of do-nothingness in Washington, it's also a reminder that loans aren't free money. It's one of those Life 101 lessons that college kids sometimes forget: The bill always comes due.

Experts say some debt is OK. But mortgaging an education for the price of a new Ferrari or two seems as foolish as buying one of those sporty rides when you're on a Ford Focus budget. It's a decision that doesn't always pay off.

Costs at a private university for my kids, who are both younger than 7, are projected at just under $800,000. To prepare for that, my wife and I would have to save $2,500 a month. Time to get the broom out and start sweeping.

A public university would cost us about $318,000 for the two and require putting away $995 a month; though significant, it isn't nearly as scary.

In recent years, tuition has risen just above 8 percent at public universities, while for private schools it's up 5.1 percent. Inflation has averaged 2.4 percent. Incomes have been outpaced by tuition and fees since the 1970s, according to Jennifer Ma, an independent policy analyst at the College Board.

Although the six-figure debt stories often gain attention, Ma said less than 60 percent of students take loans, and the average load is about $22,000 each. It's the economy that's a problem now, she said.

"It has become more challenging for many families because many families are struggling," she said.

The good news is that there are plenty of options for students -- like starting off at a community college, attending a public university, paying interest on a loan as you go, or picking up one of those campus jobs, custodial, security or administrative.

Paying for college is difficult for a lot of people. It's easier when you're making smart choices. Otherwise you'll just end up paying for it later.