Keeping it Co-op!
Some of you may have worked your way through getting a college education; but what if there were a way to work as PART of your college education? Well there is, it is called a Co-op program. The most basic explanation of a Co-Op program is that you take semesters out from “school” to work at a firm in a field that interests you. This earns you money, experience, and college credit! Many high-schools offer similar programs often called Co-op or work study, where the student attends school ½ a day and the rest of the day is spent working, while still earning credit.
Sound a lot like an internship to you? While both Co-op programs and internships help college students get real world experience, the similarities end there. I’m sure we’ve all had a run in with an office intern; shuffling papers, working as much as possible to make ends meet, and coming into the office with bags under their eyes from staying up all night to study for a test or finish a paper. Interns often are burning the candles at both ends and while there are great benefits to an internship, I believe there are greater to a Co-op program. Traditionally the internship is for upper class, or even graduate level students. While internships can pay fairly well, they are not usually counted towards college credit as they are often independent of the college or university. An internship is usually completed throughout a given semester or school year, all while still attending classes. Internships give great experience to students who are just about to graduate and enter the workforce, but can also be very demanding considering the study demands of near-graduate students.
Co-op programs on the other hand are normally available to students at all class levels, from Freshmen even up to graduate level. A Co-op program is a partnership between the college and the sponsoring company; the company receives a worker (who is paid a fair wage) and the college is able to provide real world experience to its’ students and hopefully increase the employment rate for graduating students. The Co-op program takes the place of a semester at school and often goes in rotation, a semester of traditional schooling and a semester at the Co-op. While this leads to a little bit longer time until graduation (about 5 years instead of 4 for a bachelors degree) the benefit is worth it in my opinion. Most Co-op jobs pay about $10,000 or more, with some paying as much as $18,000 per semester. Don’t expect to get rich as a Co-op student, but that money can be a real benefit toward your college debt. Also the experience with a company over an extended period of time can pay dividends at graduation, since students will already be trained and integrated into the company, it can be an easy step to move into a full-time position.
The money earned from Co-op programs can be a benefit at tax time as well. In the past money earned from Co-ops counted towards a students’ eligible income for the FAFSA, meaning all the earnings could increase the families Estimated Family Contribution (EFC). Recently there have been changes that allow Co-op earnings to not count toward the students income, so you can keep receiving a larger amount of Federal Financial Aid and have some extra cash to help pay off your loans. A quick math lesson: A student making $10,000 yearly at a Co-op program X 4 years in the program = $40,000 extra dollars at graduation. That $40,000 can go a long way toward paying off student loans, and the experience can help you move right into the job market.
Most schools are offering Co-op now, be sure to check with your colleges’ advisor to find out what options might be available to you. And as always, if you have questions about how you are going to pay for college, give Indy College Funding a call, we will be glad to help.
Kurt Supe offers securities and advisory services through cfd Investments, Inc. and Creative Financial Designs, Inc, respectively. Member FINRA/SIPC. Indy College Funding is not affiliated with the cfd companies.