If you or your child is headed towards the senior year of high school, congratulations! The majority of high school is now behind you. But there’s something big coming your way and it’s called choosing a college. So, where do you think you would you like to be – near the ocean, close to great skiing, in a small town or living the urban life?
Questions to ask yourself
While an important question when choosing a college is where would you like to live for the next four or five years an equally important one is which school or schools offer an education that would fit best with your career plans. In other words, if you believe that you seriously want to be a veterinarian, you’d probably be better off not going to a school that offers only a liberal arts education. Conversely, if your dream were to teach history at the college level, a school with a strong liberal arts bias would be a much better choice than one that includes the word Technology in its title. Of course, you cannot separate any of this from the fact that some schools may accept you and others may not. If you or your child is carrying a straight 4.0 average, has been active in extracurricular activities and a student athlete, the odds are that he or she will be accepted by most schools. But if he or she has been carrying a B average and not an athlete, some of those letters may be ones of rejection.
The money factor
Finally, there is the inescapable fact that college costs money. While it’s hard to figure this all out, a good way to start is by creating a spreadsheet using information from the financial aid offices of the schools you or your child is considering. This should include a column for tuition, room and board, books and fees, transportation, cell phone fees and miscellaneous expenses. Of course, your vertical column will consist of the various schools being considered. Once you’ve filled in this information you should have at least a rough idea of what a year at each of the schools will cost.
Half the equation
Determining what a year of college will likely cost you is only half the equation. The other half is calculating how you will pay for it. This typically will begin in January of next year when you fill out the Free Application For Federal Student Aid (FAFSA). You will need to complete this form even if you don’t think you’ll be applying for federal student aid because virtually every college in the nation uses it to determine what if any aid it will offer you or your child. As an example of this, you will need to have the following documents or information available in order to fill out your FAFSA. • Your Social Security number (it’s important that you enter it correctly on the FAFSA!) • Your parents’ Social Security numbers if you are a dependent student • Your driver’s license number if you have one • Your Alien Registration Number if you are not a U.S. citizen • Federal tax information or tax returns including IRS W-2 information, for you (and your spouse, if you are married), and for your parents if you are a dependent student: o IRS 1040, 1040A, 1040EZ o Foreign tax return and/or o Tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federal States of Micronesia, or Palau • Records of your untaxed income, such as child support received, interest income, and veterans non-education benefits, for you, and for your parents if you are a dependent student • Information on cash; savings and checking account balances; investments, including stocks and bonds and real estate but not including the home in which you live; and business and farm assets for you, and for your parents if you are a dependent student Finally, here courtesy of National Debt Relief, is an overview of the FAFSA and information as to why it’s critical you and your parents complete one.
Before you take out a loan
One staggering statistic we read recently is that the average college student graduates owing around $30,000 in student loan debts. If you would like to keep your child from graduating this much in debt, be sure to ask the schools that he or she is considering for their Financial Aid Shopping Sheets. This is a form developed by the Consumer Financial Protection Bureau (CFPB). It’s now being used by more than 2,000 schools and is designed to provide parents and students with good information and a clear set of facts before they sign up for any student loans.
A helpful website
The CFPB has a section on its website titled “Paying for College.” You might take the numbers from the spreadsheet you developed on college costs and plug the information into this website to see comparisons of first-year college costs – three schools at a time. This will also show what you might owe in student loan debts when you graduate. Even if you have not yet received any financial aid offers from any schools, you should be able to use it to at least make estimates. You can also tweak the numbers by changing factors such as living in off-campus housing rather than in a dormitory and then how that choice would affect how much you might need to borrow in student loans.
What kind of aid might you receive?
Naturally, the best kind of aid to receive is the kind you don’t have to pay back. If you or your child is a stellar athlete, he or she might qualify for an athletic scholarship. And while academic scholarships are difficult to obtain, there is always that possibility. Beyond this most schools offer other aid in the form of work grants, grants-in-aid and what’s called work-study programs. In addition, the US Department of Education (ED) offers free financial aid in the form of Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Programs, and Teacher Education Assistance for College and Higher Education (TEACH) Grants. It’s also possible that your state offers some forms of financial aid. Where we live there are Denver Foundation Scholarships and Boettcher Scholarships that cover the full costs of a four-year education. There are more than 30 other scholarships available to students in our state including one for young men and women who were golf caddies
A one-word recommendation
When it comes to borrowing money to pay for college, we have a one-word recommendation: Don’t – unless there are simply no other viable alternatives. Beginning life after college owing $20,000, $30,000 or more is sort of like having a millstone around your neck. It will limit many of your financial choices for at least the first three to five years after you graduate. You might find you have to take a job you don’t like very much just so you can pay on your student loan debts. And if you’re in a field where you will need a graduate degree, you would likely end up piling more debts on top of those debts.
The one word to avoid at all costs
If you are forced to take out student loans there is one word you want to avoid at all costs and it is the word default. You are considered to be in default on a student loan the day after you miss a payment. Yes, just one day and one payment. Ninety days after this, your lender will report your default to all three credit bureaus, which will have a dramatically negative affect on your credit score. It’s even possible that your debt will be turned over to a collection agency and trust us when we say this is something you just don’t want to see happen. Debt collectors have a reputation that’s well earned for being totally pitiless when it comes to collecting a debt. In addition, if you have a default on your record within the past three years you could find it impossible to buy a house using a FHA (Federal Housing Administration) guaranteed loan.
Not an easy decision
As you have read, there are a number of different factors that go into choosing a college or university, not the least of which is money. Many students today are electing to spend their first two years at a community college and then transfer to a four-year private or public school. This is a way to cut college costs considerably and yet still graduate from a “name” school. For that matter, many other students are choosing to get their undergraduate degrees from middle-of-the-road state schools and then use the money they saved to get their graduate degrees from more prestigious colleges or universities.
If student loan debt is already a problem
National Debt Relief recently launched a program that will help borrowers find a debt relief program for their student debt. It provides a consultation service that will match your specific student loan situation, employment conditions and financial capabilities with the right debt elimination program. It will also help with the paperwork that will allow you to enter into such a program. National Debt Relief charges only a one-time time flat fee that will be placed in an escrow account. There is no maintenance fee or additional charges. They will only withdraw your payment once you’re satisfied with the paperwork and the debt relief program you were recommended.