31 May Can Your Family Afford a College Education?
It’s an age-old question – can our family really afford to send our children to college? No matter what economic group you are in, the cost of a college education can weigh heavily on the family’s finances. Some families think a college education at a high-prestige school is mandatory, no matter what the costs may be. Others take a more judicious approach, so that the economic costs don’t put unbearable stress on the family or the student. Here are some questions which may help you make this very important decision:
• Do we have funds available? Some parents or grandparents may have started saving for college when the student was young, so there is a substantial amount of money available to go towards this goal. Other families with a larger income may have access to sizeable discretionary funds, so paying for tuition and other expenses doesn’t put an undue burden on their budget. But most families are in the situation of having to juggle and stretch their available dollars even further to cover college costs.
• Is your child gifted? Students who have exceptional academic, athletic, artistic or other skills might be eligible for a substantial scholarship from their selected college. This will certainly reduce the amount of money that is coming out of the family’s pocket, but many students still do not qualify for this financial support.
• Do you qualify for financial aid? There are various forms of federal, state, and institutional financial aid available which may help lighten the load. Your child may be eligible for grants or other scholarships that do not have to be repaid. He or she may be able to participate in the federal work-study program to earn money while attending classes. The only sure way to determine the amount of financial aid you qualify for, if any, is to complete the FAFSA (Free Application for Federal Student Aid). The FAFSA goes live October 1.
• Can you afford student loans? The last resort for most families is to borrow money through federal and private student loans. This option takes careful planning to ensure that you do not borrow more money than needed, and you will have the financial wherewithal to repay all loans once your student has graduated.
It is possible you may discover that you still cannot afford to send your student to the desired college. This may require some rethinking of priorities so that you can make a decision which is best for the entire family, and not just the student.
Get more tips on saving for college with my new book, Secrets of a Financial Aid Pro. It takes you through the various types of college financial aid, shows you how to use federal and private student loans, and answers questions about how to talk to children of any age about money. Order it now, no matter how old your child is, and get the money discussion started with your student.