College Financing

One of the most important financial decisions facing parents is on college.  Of course, while it is difficult to find a financial advisor, or to use a financial planning guide for college, there are some things that parents and students can do in order to cut down on some of the costs of college.  By taking into consideration the following tips, and possibly accessing a wealth management firm or certified financial planner in Philadelphia, or wherever you live, college can be a less costly venture than you may have originally planned for.

“Ease up on the Gas!

Applying to too many or too few of schools could prove costly.

Nettleton recommends the ideal number remains between 6-10 applications.

“You should have one or two what we call ‘reach schools,’” Nettleton further explained. “Reach schools might be a higher tier school that if everything went well for you academically and financially, you’d love to try to go there.”

“In addition to that you need to have one or two of what we call ‘fall back’ or ‘safety schools.’ These are schools that based upon the profile that the student is definitely in the top 25 percent of applicants and will get into that school regardless.”

The remaining four to eight schools should fit under the ‘competitive’ category. These schools will require some additional effort and a strong GPA to reach acceptance.

Borrowing from the Unknown

Understanding and mastering student loans is perhaps the most complicated process in all of the college process. Because of the complication, many families take the easy road and sign a loan they do not thoroughly understand.

Nettleton recommends applying for a direct loan, one which is directly supervised and carried out by the federal government. Another option is the Parent Plus Loan available in the parent’s name only. Many families are finding this one of the few alternatives mostly because the student alone can only borrow $5,000 dollars in their first year through Stafford Loans.

“It’s easy to sign a document and say, “Great. We’re into things.” Later on when they come to roost, that’s the big problem,” Nettleton conceded. “What we’re finding is the families who have taken on debt, the parents it’s impacted their lifestyles, it’s impacted their retirement. Families suddenly still have Parent Plus loans or other loans that are rolling into retirement. They’re not retiring at 65. They may be working to 72, because of college loans.””

By keeping college visits either close together, or limited in the number of visits made, the cost of at least visiting as well as applying, because applications are usually at least fifty dollars each, to a minimum.  Although this may not seem to make much of a difference, saving some money is certainly better than saving none at all, especially in the current economic times.

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Posted by Jay McGrath | Leave a comment