If you are a parent and planning on sending a child to college soon, you are going to be very happy once you read this post. That’s because there have been some very cool trends taking shape that will help you spend a lot less for a quality education.
Side note: Keep in mind that not every kid needs to go to college. There are a number of good jobs your children can get without spending 4 years earning a degree . Talk about saving money. You can’t beat that approach!
According to Financial Advisor Magazine, more and more people are just saying “no” to insane college spending. This is a great trend and here’s why .
Even though 67% of us started saving for our children’s college years ago, the typical family is only going to accumulate 16% of the total cost by the time the kids go to school. This unhappy statistic was provided by Fidelity Investments College Savings study. Looking for details?
The study indicates that even wealthy families (those with incomes over $150,000) usually only save about $70,000 by the time their oldest child is 18. With private school clocking in at $50,000 a year you can see that there is a problem.
How are people dealing with this?
That’s the good news. College trends indicate that college spending patterns are in your favor. Almost half the people in the Fidelity study are sending their children to public, two-year schools before they complete their Bachelor’s Degree at a 4-year school.
On top of that, moms and dads all over the USA are telling their kids to get off their butts and graduate school in fewer years. Nice. The number of parents using that tactic is up about 300% – to 44%. And fewer kids are accepting admissions to fancy pants expensive elite schools and opting for the less expensive public schools.
This is all very important. In the past there was a great deal of peer pressure to attend and send kids to expensive private schools. Parents found work-around methods to find the cash. Those included:
- Home equity loans
- Saddling the children with student loans.
Make sure you resist these measures. You don’t need to mortgage your future or your children’s future. Use peer pressure to “convince” your little angel to take it easy on the college spending.
Of course financial aid officers at colleges will try to talk you into looking at the three alternatives I outlined above but please resist. Schools can and do provide big bucks for grants. If your student can tap into that resource, you should go for it by all means. But you should not go for student loans, decimate your retirement or refinance your home for this no matter how low the interest rates are. Financial aid should only be relied upon as a last resort. Teach your children how ugly and “uncool” it is to take out loans for college.
Grants made easy.
The best way to belly up to the grant bar is to apply to less-competitive colleges. These schools have cash to loan but since fewer top-notch students are applying, it will be easier for your student to win an award.
What are you doing differently when regards to college savings/spending? Do you think it is absolutely critical that your child attend the most expensive undergraduate school you can’t afford? If so, why?