We’re all looking for ways to reduce college costs. This guest post by Aja McClanahan points out practical steps that should be considered. Learn more about Aja and her family’s creative journey out of $100,000 worth of debt and into a mortgage free home.
Watching the CNN documentary, Ivory Towers, left a knot in my stomach. The frustration and hopelessness experienced by some of the students was so familiar. The film features students with hundreds of thousands of dollars in student loans and no real prospects for gainful employment. I remember being there so vividly. We are determined that our kids will have a different reality!
To this end, my husband and I are already thinking about higher education for our children, 5 and 9, right now. After research and practically walking out some strategies, I’ve come up with a list to help anyone jumpstart college planning.
1. Begin Saving Early – You may think you don’t have enough to save, but look into your cable and restaurant bills or perhaps your clothing allowance. If you can find at least $50 per month to invest in a mutual fund or similar investment vehicle for 18 years, assuming an average 12% return, you can rack up $38,000 in savings for college expenses! There are calculators out there that can help you play around with scenarios and come up with monthly contributions that will work for your family.
2. Start College Early – With technology, it is easier to start the college course loads earlier. Good options for early starts include online courses, Advanced Placement (AP) classes in high school and even community college. There are many ways students can start learning at the college level earlier to avoid higher costs per credit hour on campus.
3. Develop a Plan With Your Child – Let them know early and often that education is a privilege and not a birthright. They are expected to work, save and contribute to college before, during and after their enrollment. Ambitious college-bound teens, should start on a plan as early as 8th grade. Don’t be shy! Show them the real cost of college tuition and the work it will take to make it happen. If they expect to go to college at 18, they should have a certain amount of savings and scholarships. They should be leaning toward a school they can afford with their available resources.
4. Give Them Options – Starting college doesn’t have to happen at 18. People can go to work first or enlist in the armed forces where they can later enroll in school and even get tuition costs covered. Entering school at 23 or 24 isn’t the worst thing that could happen to someone.
5. Assess – You should be gauging your child’s propensity and hunger for education throughout their life. If you’ve got a consistent C student, they may not be the best candidate for the $60k/year school. That’s OK. They could be late bloomers or really be meant for a path that doesn’t include higher education. Don’t be afraid to let go of your expectations and trust that there are many ways to success, higher education being only one of them.
What are you doing to prepare for the financial aspect of your child’s college experience?