At this time of the year, college acceptance letters begin to flood in, reaching the hands of anxious students. But that worry about receiving an acceptance letter is often eclipsed by a bigger worry – how a family will pay for college. That fear is reflected in The Princeton Review’s latest “College Hopes and Worries” survey, which lists paying for college as the biggest worry facing students and their parents.
Why the Worry?
One glance at rising tuition costs can be enough to incite panic in both parents and students.
“It’s heart-stoppingly expensive and it causes so much fear for students and parents,” Rob Franek, editor-in-chief of The Princeton Review, said in an article.
Private universities are averaging $42,000 for this school year, while public schools cost an average of $26,000 for students attending from out of state and $11,000 for in-state students, according to LendEDU.
The sticker shock for parents and students seeing the figures for the first time, along with the knowledge that Americans now collectively owe $1.45 trillion in student loan debt, should be enough cause for concern with most families.
The average student graduating with a bachelor’s degree typically owes in the neighborhood of $25,000 in student loan debt upon graduation.
What Families Can Do About the Expense
Instead of merely worrying about it, parents and students should come up with a workable plan to crush student loan expense instead of allowing it to crush them.
By planning far in advance of college, the expenses can be more manageable. Students are less likely to take on private student loans or even federal student loans. They’ll have the opportunity to look for scholarships, and on top of that, a student could get more help from their family.
One thing parents can do in the years leading up to college is form a 529 college fund. It’s a savings account that provides federal and possibly state tax breaks. The fund is a popular way to save for college costs.
If parents are worried because they don’t have any extra money at the end of their pay periods, they may need to get creative about financing this fund. By planning years ahead of college, the occasional evening or Saturday of overtime can add up if that earned money is saved in the 529 fund.
When a high-school student is within a couple of years of attending college, they may want to think about getting a part-time job to help with the cost. In the year before college, they should begin applying for every scholarship they can find – whether they think they have a chance or not.
Also, parents and students should fill out a Free Application for Federal Student Aid. Many students think they won’t qualify for aid, but they do.
Students should speak to the college of their choice about doing a work-study job to defray their college costs.
Finally, if parents and students are still concerned they won’t have enough money to finance college, choosing another college might be a route they should consider. By attending a junior college for two years before transferring to a four-year university, students can save thousands of dollars. It might not be an attractive option at first, but financially, if the other methods fail, it can make a lot of sense.
Author: Andrew Rombach
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