â€śAs with any real estate investment, you have to do your homework,â€ť says Stewart Welch III, a financial planner in Birmingham, Alabama. â€śSpend some time exploring the neighborhood. Youâ€™ll want to find a home located near campus, preferably within walking distance.â€ť Finding an appealing location will help attract tenants and make it easier to eventually sell the property, perhaps to the parents of an incoming student.
Lesson #4 Â Creative Thinking
Look for campuses seeking to diversify their student body. Schools such as Hobart and William Smith Colleges, which has a minority population of approximately 8%, may be looking to broaden the ethnic and racial landscape of their campuses. As a result of diversity objectives, schools may offer more liberal financial aid to minority students.
Invest in SAT prep. Consider this an investment with big returns. Although the cost may sound steepâ€”classes usually start at $2,000â€” some parents are doing just that and finding it to be a less expensive option than just one year of full-price college tuition. High SAT scores often translate into scholarship offers and generous financial aid. Unfortunately,Â black students score lower on the SAT than any other racial group, including Native Americans. So higher scores could mean lower college costs.
Look for more than just loans. Target schools that have eliminated loans from their financial aid packages. Some of the top schools in the country, including Columbia University, Northwestern University, and Stanford University, have pledged to reduce student debt or taken steps to significantly limit the loans low-income students would need to take out. To lower costs, consider limiting your childâ€™s choices to such schools. Go to www.projectonstudentdebt.org/pc_institution.php for a list of these colleges and universities.
Choose a state school, even if itâ€™s not in your state. Public colleges cost less money, but if your child wants to attend a public school in another state, youâ€™ll be charged hefty out-of-state rates. If your child has a good GPA and high SAT scores, or is otherwise an attractive student, try asking the school to waive the out-of-state rates.
Go to an elite schoolÂâ€”for two years. Take advantage of the community college option for your childâ€™s first two years. After he or she graduates, your student can transfer to a four-year school and graduate with a bachelorâ€™s degree that has the name of the senior college on it. Some community colleges have honors programs and are actively recruiting strong students. Top colleges like New York University and the University of Michigan have community college transfer programs.
These are just some of the cost-saving options available to students and parents. Othersâ€”such as co-op programs, attending university in Canada, and writing essays for scholarshipsâ€”may also be feasible. College is an investment thatâ€™s worth every penny, but clearly you donâ€™t need to spend them all.
— Donald Jay Korn contributed to this article.
This article originally appeared in the August 2009 issue of Black Enterprise magazine.