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!

Show Notes:

  • 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
    • Communication
    • Teamwork
    • Emotional Intelligence
    • Influencing 
    • Problem Solving and Decision Making
    • Conflict Resolution 
  • Leadership/Management
  • Computer/Technical Literacy
  • Learning – Personal and Professional
  • Strong Work/Personal Values

STATS

  • $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 

FINANCIAL AID

  • 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
  • Loans

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

  • Scholarships
  • Grants
  • Work
  • Gifts
  • Savings
  • Family
  • Loans

ALTERNATIVES TO TRADITIONAL COLLEGE

  • Workforce
  • Trade/Technical School
  • Apprenticeship/Fellowship
  • Community College
  • Take online classes
  • Military (Army, National Guard, Airforce, Marines)
  • Gap Year
  • Volunteer
  • Attend a work college

Call to Action:

  • What is your current strategy?

Resources: