Interrupting College to Earn Tuition Money

Kyle Maguire wanted to attend the University of Nebraska as soon as he graduated from high school in 2005. An aspiring Web developer, he liked the computer-science program and, as an in-state kid, the football-crazy campus fit him perfectly. But the cost—more than $6,000 a year—did not. The solution? Clock-punching as a cashier at Amigos—a local Taco Bell–style chain, where over the past three years Maguire has built up enough seniority to qualify for the restaurant's tuition-reimbursement program. When he wanted to transfer to Nebraska from a nearby community college in 2007, his kickback from Amigos made it easier, cutting his tuition nearly in half. "It's a big deal," says the 22-year-old, who keeps the coffers full by working a few shifts a week as an assistant manager. "It helps keep my student loans low while still living decently."

With money tight and tuition hikes a perennial concern, Kyle's "work now, school later" approach is increasingly common. While their boom-time siblings may have used a "gap year" to twirl through Europe or volunteer on an organic farm, many of today's degree-deferring coeds are taking a more practical approach—using a stint in the real world to earn tuition money between high school and college, or enrolling in a five-year college program that lets them take time off to work. More than a fifth of 2009 high-school graduates plan to use a working gap year to save cash for school, according to Next Step Magazine and the admissions counseling company Applywise. Another 8 percent said they planned to join the Army—which is still among the biggest providers of college funding in America—to help fund their education. Five percent now plan to defer indefinitely. Of those who do enter school right away, fewer than 40 percent will graduate in four years, according to the National Center for Education Statistics—partly because of the need to balance work with school. In short, the era of the traditional four-year degree is almost over.

That doesn't mean a mad rush for McJobs in the service world—although many low-wage employers, including Best Buy, Home Depot, and McDonald's, offer tuition-reimbursement programs. Instead, most kids are looking for a balance between a job's monetary and nonfinancial rewards. The federally backed public-service provider AmeriCorps, for instance, saw applications almost triple from 23,145 in the first six months of 2008 to 76,404 in the first six months of 2009. In exchange for 11 months of work in jobs such as after-school tutoring or home building, "volunteers" get a stipend to cover their living expenses and, thanks to the newly signed Serve America Act, more than $5,000 toward their educations.

University cooperative programs, or co-ops, also offer a mix of financial and experiential riches. Participating students alternate between semesters on campus and semesters on the job, working real gigs with one of their school's professional partners. Last year at Georgia Tech, most co-op students earned more than $15,000 for six months inside some of the world's most prestigious firms, including Merck and Coca-Cola. Free from tuition bills during work semesters, many students sock away half their earnings. "It beats any on-campus job you can find," says Alejandro Suarez, a fifth-year senior at Georgia Tech who remembers the thrill of landing a co-op job at Toyota as a freshman. For Suarez and other working students, the trick will be landing the same, or an equivalent job, when they graduate.