Student Finances

Alternative Ways to Pay for College [Video]

Imagine a day when a college degree takes just one year to complete. Tuition is free and, upon graduation, companies like Spotify and Lyft want to hire you.

Adam Braun, founder of MissionU, wants that day to be now.

Earlier this summer I spoke with Braun to learn more about his latest venture MissionU, a program that’s trying to change the way we approach and afford higher education.

(You may recognize Braun as also the founder of Pencils of Promise, an organization that builds schools, trains teachers and fund scholarships around the world.)

While college students typically attend school for four or more years and borrow money to afford tuition, MissionU is a one-year program that has an income-share agreement with students.

Students get charged tuition only once they become gainfully employed upon graduation.

The program’s current (and only) major is data analytics and business intelligence, which Braun says is the top skill set many competing companies are increasingly seeking in new hires.

The average 2016 graduate is carrying about $37,000 in student loan debt, up six percent from the previous year. It’s not uncommon for some to owe double or triple that amount, which makes for a challenging financial life once stepping into the “real world.”

As the founder, Braun was personally compelled to launch MissionU after witnessing his wife struggle to repay over $100,000 in college debt.

“We have two major issues with the very broken higher education system in this country,” he told me on my podcast. “The first is that young people are leaving school unprepared for the job market and without the necessary skills or experiences, to bring value to an employer. And then the second is that whether they get the degree or not, they’re leaving school with insurmountable crippling levels of debt.”

The total cost of MissionU is capped at $45,000 and grads are charged 15% of their salary for three years once they earn $50,000 or more. If a student isn’t making at least $50,000 in any given month, a deferral period kicks in and can be be applied for up to 48 months.

The program is in its infancy and has yet to establish a track record, but it begs the question: What are some other ways – besides scholarships and grants — to avoid the painfully high cost of attending college?

Well, crowdfunding, for one.

What began as a means for primarily funding artists’ projects, is now vastly popular way to pay for a number of initiatives, including earning a degree.

GoFundMe, for example, has a college tuition fundraising section that provides tips and resources. According to Forbes, GoFundMe “has raised $60 million from over 850,000 donations for college tuition and related expenses.” Fees do apply for those who raise money through the site.

Over at YouCaring.com, the website leverages your social network to reach donors for your cause and boasts helping its fundraisers free of charge.  Search for ‘college’ and you can find a number of accounts seeking help for school.

But why pay for college at all?

Some schools enroll students free of charge.

According to thebestcolleges.org, there are 10 schools offering free tuition this year including Macaulay Honors College at CUNY, U.S. Air Force Academy, U.S. Merchant Marine Academy, Webb Institute, Barclay College, Curtis Institute of Music, Alice Lloyd College, Cooper Union, Berea College and College of the Ozarks.

Many of theses schools have small campuses, so if you’re seeking a large community, these institutions may not be the right fit. Acceptance rates are also very low. About one in eight or 13% of applicants got accepted to Cooper Union last year. And keep in mind that at some “free” schools you may still be required to pay for housing, books and some fees out of pocket.

 

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at farnoosh@farnoosh.tv (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.