Graduate early = save cash
I was recently talking with a friend of mine whose daughter is attending college out-of-state. She was talking about her upcoming graduation which according to my calculations was happening earlier than normal. Graduating from college early? That happens?
According to my friend, when her daughter graduated from high school, she made her this offer: If you graduate from college early, we’ll give you half of what we would have spent on your education and living expenses. She wasn’t sure her daughter would take the offer but it turns out, she did. With flying colors, I might add. She has done a stellar job in school, some semesters taking 19 credit hours which was brutal, according to her mom, but she is motivated. She wants to move to New York City when she graduates and that amount of money would give her a nice start on her post-college life.
I realize that not every student gets an offer like this but think about this in terms of your own savings. Let’s look at the numbers. An in-state student would save about $10,000 (tuition, fees, room and board) by graduating one semester early. Think about that for a minute…. Think about that in terms of a student loan or parent loan that you would otherwise have to pay back plus interest (example: you’ll pay a total of $13,809.60 for a $10,000 student loan at 6.8% interest on a standard repayment schedule of 10 years). Could you set a goal like this for yourself and take one more class each semester to achieve it?
I graduated many (many) years ago and I remember taking only 12 credit hours some semesters. I wish I would have thought ahead. There were many voices at the time (advisors, friends, siblings) telling me to “take it easy” and “don’t take too many credit hours”. But not many people were encouraging me to strive to do more, and I was the kind of kid who responded positively to positive pressure. Maybe if someone had planted the seed to graduate early, I could’ve saved myself that last student loan I took during my senior year and saved my mom some money. If I hadn’t had to pay that last loan plus interest (at 8% back then), I would’ve had a head start on building wealth, stability, and security in my life. What a concept! (I was fortunate that my mom was able to pay for part of my college and I used student loans for the rest. It was quite clear that I had to graduate in four years or the financial support would stop. And I did graduate in four years – with a few summer classes at UCCS.)
In our CU Money Sense workshops, we often tell students to study hard and graduate on time. Sometimes there’s eye-rolling and I imagine they’re thinking, “well duh”. But are they really considering how much money they can save by studying hard and graduating on time or even early? It’s worth thinking about.
Susie, CU Money Sense team member