One thing all schools, school systems, and education corporations should definitely not do is wait for government intervention or help from institutional banking. Government action will be far too slow to affect the short term, and the market is far too shaky for commercial banking to offer loans to sub-prime candidates—now and for the foreseeable future. Schools large and small are summoned to fill the void previously covered by private lending. But that’s no small hole. Industry insiders estimate that private loans cover on average 20% - 50% of student tuition depending on a school’s state, course of study, tuition, program length, and demographic.

The good news is there are ways to mitigate these challenges: endowments, school-based scholarships, employee reimbursement plans, direct-to-employer partnerships, extended payment plans (EPP), fellowships, work-study programs, school-employee scholarship funds, articulation agreements, the use of financial services partners, alumni contributions, and other creative solutions will all come into play. But it comes down to smart alternative student financial planning.

Options that will most likely play into student financing in the short-term are the use of third-party accounts receivable servicing to cost-effectively keep receivables high; the employment of extended payment plans on a more widespread basis to manage the tuition gap; and the use of recourse loans (for private institutions these are used as a cash flow tool and to maintain a good cash position; and for public education corporations these are used to maintain solid quick ratio and current ratios to keep stock prices peaked).

Recourse loans, and the ability to select which students are good candidates for such plans, will be invaluable in times of capital investment and situations where spending is needed for marketing campaigns. Schools will have more control over which students can be approved and much greater control over their fiscal fortunes by properly implementing such options. There is risk, but there are also best practices and actions that can minimize this risk and turn recourse loans into a viable part of student planning, growth, and fiscal solvency.

The important thing to remember is that schools and education corporations large and small can take control of their destiny and turn crisis into opportunity by smartly utilizing the right cocktail of the aforementioned alternative funding resources. Where there’s a will there’s a way—and if schools are willing to challenge conventional wisdom, think creatively, think long-term instead of quarter-to quarter, leverage risk with opportunity, and invest in their students as an investment into themselves, they will find gold at the end of the rainbow for all.