It’s every parent’s dream to be able to send their children to a reputable college where they can earn a degree to prepare them for their futures. Though planning for their college education might be among the most expensive investments you’ll make, you may be able to decrease these costs by making these smart choices and decisions that begin with proper planning. To achieve this, college financial planning experts share these common mistakes most parents are still doing that prove to be costly in the end.
Not Saving Early
College costs have steadily increased in the past few years, rising by as much as 100 percent in just a span of 10 years. This can also be traced back to the effects of inflation, which contributes to the increase of college costs by as much as 5 or 6 percent annually; hence, the earlier you start depositing into your 529 college plan, the bigger growth your money will see over time.
As long as the college or university provides everything a student—healthy or with a preexisting condition—needs, location and cost should be secondary. For such items, there are qualified college financial planning consultants like John McDonough of the Studemont Group College Funding Solutions, LLC who can draw up a sound college plan, from finances to admission.
Whether or not to live an independent life come college is the call of the incoming freshman. Don’t let the stereotypes of college life affect your decision. Be prepared for the things to come the moment you step into a new chapter in your life. Proper financial planning for college goes a long way.
Many disputes have arisen as to whether these standardized tests do accurately measure a student’s true capability, though. Some schools, such as the University of Arizona, have addressed this issue by making the standardized test optional. However, students eligible for merit-based aid must still submit their SAT scores in order to get into school.
While ways to deal with the supposed accuracy of standardized test results are still being discussed, seniors gearing up for college in the near future would have no choice but to study well for the exam. Those who lag behind may not be able to get a scholarship and are less likely to be admitted to the school of their dreams. Regardless of how they perceive SAT/ACT, they must invest on review classes since their financial planning for college would never really land on stable ground unless they score well enough.
Most state and private institutions do not consider your primary home’s equity as a factor in financial aid determinations because these are based on FAFSA calculations of your expected family contribution. However, some private colleges, especially the expensive Ivy League types, use an additional aid disclosure form, CSS/Financial Aid Profile. Such schools are quite interested in your home equity, so expect that it will be included in the numbers should you choose this school for your child.
Comprehensive college financial planning should include research on different schools’ financial aid policies and how they treat home equity to help in evaluating which can offer your child the best options. Normally, schools that base their computations on profiles would assess equity at 5% for financial purposes. Assuming home equity of, say, $500,000 dollars is included, then that means $25,000 more for the Expected Family Contribution and less for the financial award.
It is no wonder then that high school students are feeling the stress and pressure of college admission. What can help them in effectively planning for college is the guidance of experts like John McDonough of The Studemont Group College Funding Solutions. Seasoned consultants like him offer a wide range of resources that can enhance a student’s chances of getting accepted into the college of their choice, including preparations for the SAT and ACT, evaluation of their essays, and an objective assessment of their admission application.
Student loans are some of the most persistent debts in existence. Private loan interests start to accrue upon disbursement of funds, while interest for federal loans start six months after graduation. In later years, many people find themselves choosing between paying off their debts and saving up for retirement.
Given the long term ramifications of student loans, careful planning for college funding is very important. College financial planning experts like John McDonough of Studemont Group College Funding Solutions, LLC can help parents come up with solutions that will be most viable and less of a burden for both themselves and their children in the future.
So even if Junior is just about to start school, you’d be wise to start college financial planning now. As John McDonough of Studemont Group College Funding Solutions, LLC says, though, you’ll want to avoid these crucial mistakes:
Borrowing from Your Retirement Fund
A lot of parents think that they can simply “borrow” money from their 401k plan to fund their child’s college education. Chances are, though, your kid will enter college during your 40s or 50s, leaving you precious little time to pay off that borrowed sum. Remember: it’s always easier to secure a student loan than a retirement loan, so don’t touch your nest egg if you want to retire on time.