You might be losing sleep worrying about how to afford your child’s higher education.
Here’s some timely advice if you have a high school senior who is about to commit, or has already sent in their enrollment deposit at a college.
It’s not too late to take some fiscally prudent and wise actions if their college of choice seems financially out of reach.
That is good news!
Please hear me out…
Ask for More Aid
Ask if the college has any additional funding that has become available. This tactic is especially effective if the student has not already committed to the school.
Ask both admissions and the financial aid office. Sometimes, just to get your child to enroll, the answer will be yes.
Have a dollar amount you need in mind. Up to $5,000 extra in renewable scholarships or grants per year can be a realistic number at some private colleges that haven’t yet hit their enrollment quota.
Don’t Take Drastic Measures
If paying for tuition at the college your child is considering requires overly-drastic measures for you to afford it, consider walking away now.
(This advice is emphasized for a reason!)
Overly-drastic measures include:
– Raiding your retirement savings
– Remortgaging your home
– Taking out a large Parent Plus loan that is more than three months of your household’s take-home pay.
Factoring in the four percent fee and five percent interest plus the fact that Parent Plus loans are nearly impossible to discharge in cases of bankruptcy, a lot of people would be better off resolving their child’s college payment balance on a few zero-percent-interest promotion credit cards for 18 or 24 months at a time.
When to Say “No”
While college is a worthwhile investment, paying for it is a financial decision that will almost certainly impact you and your child for 20 to 30 years, maybe longer. Thankfully, now is the time when you can change your mind if the math doesn’t add up.
There are other options available for your child that don’t involve choosing an expensive college that will have a negative financial impact on the rest of your life and your child’s.
If the combination of:
– your child taking out the maximum federal loans (in their name only)
– your child’s summer job savings
– your savings
– the amount you can cash-flow out of your budget
– the amount you can raise from selling all of your stocks and any investments
still don’t come close to the cost of the college your child is planning to attend—then you’re wise to be very worried about the cost, because you’re looking at a college that is way too expensive for your family to afford.
It’s not too late for your child to choose a different college, even if it means taking a gap year to work, take an internship, volunteer or travel. It’s not popular to say this, but right now, there are still some options available.
Get a few applications into schools that have rolling admissions for the fall of 2021. This time, run the NPC (net price calculator) on the school websites first—and only have your child apply to the ones with net prices that come close to what you can afford.
Heads up! Small, manageable student loans taken to bridge a gap are a blessing that relieves your financial pressure and provides opportunities for your child.
But massive student loans are a curse adding financial pressure and taking away most of your future opportunities while saddling your child with debt.
There is a stark difference between the two.
I realize choosing a different school at this late date may legitimately (however temporarily) break both your heart and your child’s.
And I hope my sensitivity to this is coming through. I’m not trying to be mean nor judgmental, and I’m definitely not trying to Monday morning quarterback anyone’s existing student loan debt, nor belittle anyone for having large Parent Plus loan debt.
Both my husband and I had student loan debts when we graduated from college, and my oldest son has federal loan debt right now.
This Is Personal
I’m not speaking from an ivory tower here. I am in that same boat as nearly everyone else.
We are making the same kinds of hard decisions as a lot of people right now.
As a parent without enough savings, who already sold all her investments, and as a middle-class family that never qualified for a dime of Pell Grant or need-based aid (until next year when we’ll have four children in college at the same time), I can really relate to feelings of angst and anxiety.
There is a sense of pride when your child is accepted to a great school. There are hopes, dreams, and the realities of knowing that great school is one we just couldn’t afford.
I. Have. Been. There.
My goal is to help even just one family avoid an optional massive debt trap, if I can.
The bottom line is that with careful school choice, and flexibility you can find excellent colleges that won’t cost you as much as some others. They may be further away from home or much closer than your child initially planned. They may be in a city, or someplace rural.
They may have much more diversity than you expected or far less. The majors they offer may be close but not precisely 100 percent to a T what your child was looking for.
A very good education for your child can be had at costs that won’t keep you up at night, but only if your child is willing to be flexible about which college they enroll in, or if you are willing to make those tough, awkward, hat-in-hand phone calls and personal visits to the college of your child’s dreams.
Appealing for higher renewable aid before they enroll requires also being firm about regretfully declining the offer if that request is denied.
I know this advice doesn’t apply to everybody. And if it doesn’t apply to you, I’m glad!
Reaching financial stability means seriously achieving big goals.
However, if this advice does apply to you, I hope it helps and provides some encouragement and inspiration that you still have options that are better than overly-drastic, future-altering measures.
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