A true measure of talent is the ability to complete a tough skill and make it seem easy. It’s like when you attend a concert, or watch a live performance. You’re amazed by how incredible the performers are on stage, but you don’t see the hours of rehearsals, or late night sessions.
Today’s post is going to ask you to be in the rehearsal, not the performance. It is about doing the leg work in preparation for the big day. What big day is that?
Planning for college is a tough feat, especially as a parent. As the cost of tuition continues to rise, many families need a multi-pronged approach to paying for college that often includes a mix of personal savings, scholarships or grants, and student loans.
The amount of student loan debt that encumbers new graduates is frightening to many parents with a teen soon off to school, but there are ways to prepare ahead of time!
I’m going to provide you with the tools to create a solid strategy for managing student loans and getting started well before your child moves into the dorm. Most people begin school searches in their child’s junior year of high school – and that’s the perfect time to start planning!
During each of these steps, I encourage you to have an open, honest conversation with your child. Developing this strategy together will help both of you be on the same page and have a deeper understanding of the situation. It will also ensure that there are no surprises once the bills start coming in.
In this first step, you will collect the facts about your child’s future scholastic experience. Below are some questions to get you started.
Now that you have an idea of the number you are working with, it’s time to take a hard look at your savings so far.
It is always good to look at your current savings goal and see how it is coming along. After you get a good idea of the amount of money you have already saved and how much you project to have by the time school starts, it is time to look at other ways to fund your child’s education.
The most natural extension is to evaluate the type of scholarships and grants that are available for each place your child is considering. You and your child can do some research into the scholarship opportunities at each school and come up with a rough number that you can expect from scholarships.
Now is time to move onto the remaining balance, and that will come in the form of student loans.
Now is the time to do some final estimates! Take all of the information you have to determine the approximate amount of money your child will need to borrow in student loans. If you don’t like the number, that is ok you have time! Since college isn’t starting for your child tomorrow, there are additional methods you can look into to help mitigate the loan amount.
You will want to look into the type of loan they should take out. I advise federal direct loans because they are the most cost-effective, protected, and effective loan choice out there. The interest rates that accompany the loans are reasonable and have government programs like income-based repayment and loan forgiveness.
Doing this research will help both you and your child feel more confident in how their education will be funded. When you do the leg work, you get to reap the rewards when they really count. I know that the college process is a long journey, and I would love to help you and your family fit education into your financial goals. What are you waiting for? Give us a call.