Alright parents, you have done your job and your child has been accepted to college. Now you just have to figure out if you can afford it. I’m sure your house isn’t worth what it once was and I bet that portfolio isn’t looking too healthy these days. You don’t want your child to graduate with more debt than they could ever pay off but you don’t want to threaten your own retirement either. So we’ve put together a few tips to help keep that dream of higher education from turning into a nightmare.
Try to limit your debt
Student can borrow from $5,500 to $7,500 a year in federal subsidized Stafford loans, and parents can cover the rest with parent PLUS loans. With most kids taking at least 5 years to complete college these debts can add up quickly.
With student loan defaults on the rise, students need to try not to borrow more in college loans than their expected starting salary. Some advisors even suggest that you figure out what the monthly repayments would be then limit your child’s loans to no more than you could help with. Another guideline would be to try and keep total debt payments (your kid’s loans, PLUS loans, mortgage, and all other debts) under a third of monthly income.
Search for free money
Make sure your kids apply for as many scholarship offers as possible. There are millions of dollars of scholarship money that is not awarded every school year. Also, filing the FAFSA early will let you know if you can qualify for grants and other government assistance before turning to student loans.
You need to also figure out how much you can contribute to your child’s education. The more cash you cash you can bring to the table the less debt you will all incur. With today’s job market though, make sure you have security in your career before you pull from assets. And never figure in retirement funds, there is no point in compromising two futures.
Play the aid game
If you can’t borrow enough money using the guidelines above, check with the aid office at the school. If your situation has changed since you filed the FAFSA, the school may increase its package.
If your situation hasn’t changed, then your success depends upon how desirable your child is to the school. You can try and let the financial aid office know that your child has a better offer from a rival college. If the aid officers call your bluff and stick with their award, you may want to consider choosing the less expensive school or have your child start at a public college or junior college and then transfer in. You can tell your kids that this will make it easier to pay for that expensive grad school.
Can You Pay For College?
Posted by College Spot in College Finance
Alright parents, you have done your job and your child has been accepted to college. Now you just have to figure out if you can afford it. I’m sure your house isn’t worth what it once was and I bet that portfolio isn’t looking too healthy these days. You don’t want your child to graduate with more debt than they could ever pay off but you don’t want to threaten your own retirement either. So we’ve put together a few tips to help keep that dream of higher education from turning into a nightmare.
Try to limit your debt
Student can borrow from $5,500 to $7,500 a year in federal subsidized Stafford loans, and parents can cover the rest with parent PLUS loans. With most kids taking at least 5 years to complete college these debts can add up quickly.
With student loan defaults on the rise, students need to try not to borrow more in college loans than their expected starting salary. Some advisors even suggest that you figure out what the monthly repayments would be then limit your child’s loans to no more than you could help with. Another guideline would be to try and keep total debt payments (your kid’s loans, PLUS loans, mortgage, and all other debts) under a third of monthly income.
Search for free money
Make sure your kids apply for as many scholarship offers as possible. There are millions of dollars of scholarship money that is not awarded every school year. Also, filing the FAFSA early will let you know if you can qualify for grants and other government assistance before turning to student loans.
You need to also figure out how much you can contribute to your child’s education. The more cash you cash you can bring to the table the less debt you will all incur. With today’s job market though, make sure you have security in your career before you pull from assets. And never figure in retirement funds, there is no point in compromising two futures.
Play the aid game
If you can’t borrow enough money using the guidelines above, check with the aid office at the school. If your situation has changed since you filed the FAFSA, the school may increase its package.
If your situation hasn’t changed, then your success depends upon how desirable your child is to the school. You can try and let the financial aid office know that your child has a better offer from a rival college. If the aid officers call your bluff and stick with their award, you may want to consider choosing the less expensive school or have your child start at a public college or junior college and then transfer in. You can tell your kids that this will make it easier to pay for that expensive grad school.