As the parent of an upcoming senior, I have a lot of questions regarding sending my daughter to college. While it is still about a year away, the planning has to start now or opportunities will be missed.
Going on campus tours, evaluating majors, filling out admission applications, and searching for scholarships is top priority. These are decisions that must be taken seriously and with caution, especially with the changing dynamics of the college environment because of the COVID-19 pandemic.
The other elephant in the room is the massive student loan debt crisis we are facing in the United States. According to Forbes, there are around 45 million borrowers with a massive $1.6 trillion dollar student loan debt. U.S. Student loan debt is now the second highest consumer debt category - behind only mortgage debt - and higher than both credit cards and auto loans. Student loans are very easy to qualify for and the effect on the parents or students financial future is not always understood.
As parents or guardians, how are we supposed to navigate all of these fears and decisions? Knowing when and if a student loan should be taken or if one college vs. another is the right choice.
These are questions I am personally facing, as well as, our college planning clients. Below, I want to share a collection of questions we are currently be asked:
Should every child go to college?
Is it worth the cost to send my child to college?
Should they go to a community college or junior college first?
Should they go online?
We have saved some money, but how do I fill the gaps?
Do we rule out colleges that are more expensive?
I want my child to go to their dream school, but how do I pay for it?
If necessary, what kind of student loans should we take out and what are the consequences?
How do we know when the amount of student loans we are taking out is too much?
Should I consider a Home Equity Line of Credit instead of a student loan?
I know we do not qualify for federal or state grants, should we still fill it out?
How do we address all the stresses and questions we face?
First, start now! Regardless of your child’s age, there is always something to do. This is the elephant we eat one small bite at a time.
Bite Size Steps to Take:
Consider the options, such as college, trade school, or other specialty schools.
Figure out a ball park range of the education costs for the required degree/certification.
Take into consideration how much time you have until the first tuition bill comes.
Educate yourself on the savings options available, such as a 529 Education Savings Account or other investment options.
If your child is in high school, have a heart to heart talk about the costs of continuing their education and the importance of applying for scholarships and giving serious thought to their major and future.
Create a timeline (some colleges are already accepting applications for upcoming high school seniors).
Research and create a study plan for taking the ACT and/or SAT.
Considering reaching out to a financial planner who specializes in college planning. (Here at Rooted Planning Group, this is one of our specialties.)
If you are a parent of a future college student, we hope these tips gets you started. If you are interested in college planning, check out this video on what the process looks like for our college planning clients.