College graduates, on average, earn higher incomes than people who don’t go to college. But the cost of earning a degree has risen rapidly, so there’s a lot to think about.
And that’s the point – parents and children need to think and talk about their hopes and ideas, and consider what may be possible.
Starting to save early helps. Set up a 529 college savings plan when each child is born, which gives you a foundation. When your child is older, investigate FAFSA (federal student aid), scholarships and grants.
Getting loans to pay for college is the norm today. About 65% of college students are borrowing money, reports the Institute for College Access & Success.
The average student loan debt is $35,359, according to experian.com – a 26% increase in five years.
How much is OK to borrow? It can depend on the career. Leaving college with higher than average debt can work out for graduates starting careers with higher incomes, such as pharmacist or doctor.
Look beyond raw tuition numbers when choosing a college. I’ve seen cases where small private schools cost less than big state universities because the private colleges offered much more scholarship help.
Talk about college with your kids, and don’t feel obligated, as parents, to pay 100% of your daughter’s or son’s college expenses.
I’ve known parents in their late 50s with $75,000 in debt from sending their kids to college. That jeopardizes the parents’ retirement plans.
Paying for college can rattle your nerves, but students and parents alike can calm down by planning and working together.