In this week episode we will be discussing the top planning strategies you can take to get ready for college. This is good information for both parent and student. Enjoy!
- Begin with the end in mind
- What kind of skill set is needed
- Options for acquiring that skill set – Make a list
- Elite vs affordable post-secondary options
- Research deadlines, applications, all costs, awards, loans, projected pay
- Create timeline to complete necessary steps
LIFE, CAREER AND FINANCIAL GOALS?
Student loans could hold you back from many goals:
- Buying a house
- Starting a business after college
- Moving to a city with a high cost of living
- Pursuing nonprofit work or other typically low-paying careers
- Traveling the world or having other enriching experiences
SKILLS TO DEVELOP
- Interpersonal Effectiveness
- Emotional Intelligence
- Problem Solving and Decision Making
- Conflict Resolution
- Computer/Technical Literacy
- Learning – Personal and Professional
- Strong Work/Personal Values
- $1.56 trillion in student loan debt
- About 45 million borrowers
- About $521 billion more than the total U.S. credit card debt.
- 11.5% are 90 days or more delinquent or are in default
- Average monthly payment (those not in deferment): $393
- Median monthly payment (those not in deferment): $222
LOAN VS PROJECTED INCOME
- Debt at graduation should be less than your annual starting salary
- Less than or equal to 8% of your monthly income
- Scholarships and Grants
- Take the time
- Can be worth thousands. Not only in what you receive but what you would have paid.
- There are thousands, if not millions of scholarships available
- Work Study
TYPES OF STUDENT LOANS
- Subsidized Stafford: Federal loan using the FAFSA.
- Unsubsidized Stafford: Federal available to any student
- State loans: Offered by the recipient’s home state.
- Institution loans: Offered by the college
- Parent Loans: PLUS loans, Parents are responsible
- Private student loans: Didn’t qualify for federal loans or didn’t receive enough elsewhere.
- Subsidized loans no interests acure until 6 months after you graduate
- UnSubsidized interests start accruing right away
- Direct Plus start accruing interests right away
- State, College and Private Loan adjustable rate start accruing interests right away
- Avoid taking debt beyond the federal subsidized and unsubsidized loans.
- If you need more, it might be time to reconsider your plan.
WAYS TO PAY BACK STUDENT LOANS
- Pay interests while in college on the unsubsidized
- Start paying right away. Don’t wait the 6 months they give
- Pay more than the minimum. Consider a second job.
- Use debt snowball or avalanche method
- Consider private loans first. May have variable interests rate
- Pay bi-weekly if allowed.
- Consider refinancing
- Consider avoiding repayment programs. Why? Longer to pay loans back
- Does your line of work offer student loan forgiveness?
- Visualize future without student loans
- Calculators – Do the math
- Bottom line – Attack loans
WAYS TO FUND COLLEGE
ALTERNATIVES TO TRADITIONAL COLLEGE
- Trade/Technical School
- Community College
- Take online classes
- Military (Army, National Guard, Airforce, Marines)
- Gap Year
- Attend a work college
Call to Action:
- What is your current strategy?
- Books: Pay your student loans fast and the total money makeover.