Could a gap year after high school make financial sense?

BY NATHANIEL SILLIN

In some parts of the world, a gap year – a year-long break between high school and college – is the norm. It’s starting to catch on in the U.S. as well.

It’s a chance for recent high school graduates to earn money, challenge themselves, explore the world and build their resume while experimenting with different career paths.

Those who take full advantage of the opportunity often find the experience to be rewarding and beneficial. And colleges report that students who start school after a gap year tend to earn higher grades, are more involved with campus life and graduate within four years at a higher rate than their non-gap-year peers.

Lessons you could learn along the way. Many people spend at least part of the year traveling, working or volunteering away from home. During the year, they may discover that what they originally wanted to study isn’t a good fit, or may come away with a newfound passion.

Entering college with this knowledge can help them focus on a major, plan their classes and graduate early. Or, at least avoid changing majors and extending their schooling. In either case, they can save tens of thousands of dollars.

During a gap year, young adults also often take a more direct role in their day-to-day finances. They can develop a greater appreciation for earning, and spending, money. In turn, this can give them a framework when taking out student loans and an extra push to apply for scholarships.

Finding structure for your gap year. To avoid squandering the year, you can look into formal programs that can help you achieve or define your personal, academic or career goals. According to the American Gap Association (AGA), a nonprofit based in Portland, Oregon, over 80 percent of gap year students say the skills they acquired helped them be successful in their career after school.

Many choose service-oriented work. The federally backed AmeriCorps programs place volunteers throughout the U.S. to help communities in needs. Once you complete a full-time 10- to 11-month commitment, you may be eligible for a scholarship worth up to $5,815 (in fiscal year 2017). Some colleges and universities will also match a portion of the award.

Working for a local business could be another great option. You can earn money, see if you truly enjoy the work, network and may be able to line up work during school or for future summer jobs. The industry connections and mentorship you receive can also be valuable for your post-graduation job search.

Another resource for finding a program is the USA Gap Year Fairs, which profiles a broad range of gap year experiences. Privately run programs may not offer compensation, but sometimes you can work in exchange for room and board. The experience can also serve as a foundation for cover letters when you apply for jobs or college admissions essays.

Funding your gap year. There are gap year options for students from all socio-economic backgrounds.

The AGA maintains a list of financial aid opportunities that can help you fund a gap year. The mix of merit- and need-based scholarships could cover the cost of a program or offset the cost of traveling or volunteering. If you have a particular program, ask the organization for recommendations.

Also, inquire with your university to see if it recommends or runs any programs. Some schools offer scholarships to admitted students who take a gap year, and a few will give you college credit for completing certain programs.

Once you start your college education, you can try to capitalize on your year off. There are many scholarships available to continuing college students and your experience could be a good jumping-off point for an essay.

Bottom line: Taking a gap year between high school and college is increasingly popular, although still not as common as it is in some other parts of the world. While jumping right into college and getting a degree is the traditional path towards employment, some parents and students see the benefit of taking a year off to better define one’s goals and gain real-world experience before going to college.

Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.