We encourage our children to get good grades in order to get into a prestigious college or university as the first step in a path leading to a financially successful career. Time and money are spent on tutors to improve grades and courses to prepare high school students for standardized college admission tests, but we spend far too little time focusing on how tuition will be paid.
Here are three questions parents and their children should ask themselves before making the decision about which college to attend.
Will an alternative to the high-priced college serve the same purpose?
A student whose ultimate goal is to attend law school might consider attending a state school rather than a pricey private college. If the sole purpose of a bachelor’s degree is to gain admission into a top-notch graduate school or professional school, it might make more sense to go to an undergraduate school with lower tuition costs.
How much can we contribute to our child’s education?
Parental guilt and tuition costs seem to go hand-in-hand. Mortgaging the family homestead to pay the tuition bill for an Ivy League school might be one way to avoid feeling as though we let our child down, but it probably does not make good financial sense.
Even if we are able to pay costly tuition bills in order to send our scholars to the best colleges, things can change very quickly. The loss of a job or a catastrophic illness could jeopardize our ability to help with our children’s tuition bills. We are probably better off being realistic about what we can afford and helping our children find schools that fit within our budget.
How much student loan debt is too much?
Recent studies have shown that college graduates are leaving school and beginning their careers owing an average of $35,000 in student loans. We need to be realistic when choosing a college, and its related tuition cost, about our earning potential after graduation. This is true whether we are making the decision for ourselves or for our children.
The Bureau of Labor Statistics offers salary information and employment projections for most jobs and professions. This information is helpful in determining how likely it is that a student will find work and the salary the job might pay.
Would you like to learn more about how you can save for college? Call Bart Zandbergen CFP® at (949) 297-8318 or visit his website to schedule a consultation.
