Does All That Debt Freak You Out Too?
My daughter was a Senior in high school last year and so we are right in the midst of figuring out what that might mean for our family and her future.
Is she going to get caught up in all that?
Is she going to have to take out loans to pay for college?
If so, how much? And what will that look like in terms of payments for her once she graduates?
How about Parent PLUS loans? Are those in our future as well?
The one thing I want to make sure of is that whatever we/she does, it doesn’t end up as a surprise once she graduates.
We are doing our research up front and planning now based upon the college we choose and their particular business model what that will mean.
College Debt Surprises
As I see it, there are 3 different surprises that blind-side families when it comes to college debt:
- Not knowing in advance how much total debt will be taken out over the whole 4 years of college
- Not knowing what that amount of debt means in terms of a monthly payment
- Not understanding the size of that monthly payment in relation to an entry-level salary in the field of your students chosen Major
Plan Ahead to Avoid Surprises
All it takes is a little advanced planning to limit the impact of loans and a potential financial burden on your student and family.
If a student and their family do the proper planning up-front to understand those factors, they can eliminate those surprises.
You and your family can be proactive and plan ahead. You can put yourselves into the driver's seat in the college selection process instead of just taking whatever comes along.
One part of that planning is to choose a school that best aligns its business model with your funding sources. Knowing in advance how much you will need to take out in loans. Knowing which schools have business models that best align with the funds you have available and your family's financial situation.
Beyond the 529 Plan
When I say funding sources, most people just go straight to 529 Plans, but what I am talking about is much broader than that. There is a huge gap of knowledge in what is available to help fund college for students between a 529 Plan and taking out Loans.
Free money is being left on the table because families don’t know about it.
Do you know where that money is?
Do you know how to get your share of that free money?
Do you know what steps to take to make sure your student and family get as much of that t free money as possible?