Let’s Talk About the Cost of College

This election year we have been encouraged by the conversations started by both candidates (and various political interest groups) regarding higher education.  It seems like every other political ad we hear (and in Ohio we hear a lot of them) is addressed at education.  Be it the rising cost of college, student loan debt, education tax credits or who should pay a student’s tuition bill- it is important to get the conversation started.

Regardless of your political views, we can learn a lot from this campaign season.  Talking or even just starting a conversation is so important to reaching your long term goals – leading to a successful outcome.

Do you know how you will pay for your or your child(ren)’s college education? Have you discussed the plan to play with your student/parent(s)?

You’d be amazed how many times we ask this question to families and the student tells us that their parents will pay and the parents say that the student will take on loans.  Then the bill comes and pandemonium breaks! Scrambling for money, accepting loans without doing research for better options… there may be better ways to pay, but you have to start the conversation- and start early.

As you head to the polls today or reflect on the election tomorrow and beyond, keep in mind the lessons that can be learned and the conversations that can be started. Do you know how to start the conversation?  Do you know how much you’ll have to pay for college?  Do you want to talk about it- find out how much you’ll need- listen to our ideas of better ways to pay?

Call or email us today… your consultation is free and we’ll answer all your questions!

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Why Should You Care About Student Debt?

The New York Times kicked off its series “Degrees of Debt” with an article entitled A Generation Hobbled by the Soaring Cost of College. This article touches on how the cost of college has skyrocketed and how that increasing cost has and will affect the current generation of students.  This is a very timely piece with the state of the currentUS economy and the impending debate on student loan rates on Capitol Hill.

I’ve discussed this issue with my friends over the past week and have heard repeatedly- ‘why should I care?  I’m not in college.’  My response (much to the chagrin of my father) is in the form of a question- why would you not care?  If only because one day your children will want to go to college and their tuition bill will follow, but more so because of the lasting affects this will have on the American economy.  In the article Rajeeve V. Date, deputy director of the Consumer Financial Protection Bureau, draws likeness to the predatory lending norms associated with the current housing crisis- and we have all felt the lasting effects of allowing that crisis to continue on too long.

But could this be worse? An entire generation is graduating from college with a student loan payment that is double (or triple) the amount of an average mortgage payment. These students should be coming out of college, finding jobs, buying new cars, traveling the country, getting married and buying houses (they are our economic stimulus package!).  But instead, they are living with their parents, taking on whatever job they can find to make ends meet and putting every cent they have into paying off their debt to keep from defaulting on a loan that was taken out so they could better their lives through education.  Ironic, right?

So what is the answer?  Not go to college? Increase taxes to fund higher education?  Very few would agree that those are good answers.  My answer is proper planning.  Choosing the right college and knowing how you are going to pay for it BEFORE your tuition bill comes.  One could argue that proper financial planning for college should start at the moment a woman finds out she will become a mother, but we live in the real world and life often gets in the way of funding a college savings plan. Most parents don’t start planning for college until their student starts seriously talking about going college (sometime around their sophomore year of high school), and that’s OK.  Just make sure that you have a plan; this will help you avoid the last minute panic of taking out too much in student loans.

Let’s face it, student loans are a reality. Most students are going to need to take out some amount in loans to pay for college, but there is no acceptable reason that a student should be surprised by a $900/month student loan payment after graduation.  Proper planning for college is about knowing what to expect.  If you’re wondering what to expect in the coming years- sign up for a free consultation with one of our College Planning Advisors or submit a question.  We’ve been there and we are here to help.


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