Managing Finances

Are These 7 Costly Mistakes Going To Bury You & Your Student In Needless College Debt?

If you’re a parent then paying for college is probably something you’ve worried about… You see the unbelievable cost involved with sending a child (or two or three!) to college and you know that finding the money is going to be an uphill struggle.

In-state schools typically ask for fees of around $30,000 a year. Out of state schools often demand fees of $50,000+. In a world where the cost of everything is rising and salaries are remaining near enough the same, even those that have saved hard to ease the financial pressure that comes hand in hand with the college years find themselves needing an enormous amount of loan money.

Students from hard-working middle class backgrounds now graduate with more debt than ever and you may be responsible for paying back that money should your children default.

This puts everyone in a difficult situation.

Parents want to see their children enter well paid jobs in their field but after graduation, there isn’t much time to job hunt as the demands on those high-interest loan repayments come around fast.

The WORST thing about this? Most parents are burying themselves and their students in tens of thousands of dollars debt that they don’t even need.

I sat down with Afra Sanjari, the founder of National Association of College Experts, to talk about the 7 costly mistakes he feels the vast majority of parents are making. He created an online course, “The Debt-Free College Guide,” that helps parents save nearly $10,000 per year on tuition. Here are just a few of his suggestions:

1. Thinking There’s “No Help” For Parents That Earn Too Much Money

FAFSA has unrealistic expectations. Their algorithm hasn’t kept up with what parents can actually afford to pay and this leads to most parents thinking their only option is loans.

The reality is that there’s still plenty you can do to reduce the cost of college.

For example, both employed and self-employed parents can take steps to reduce their “EFC” (Expected Family Contribution) which one, stops their income and assets from driving up the cost of college and two, opens up more opportunity to receive grant money and merit aid.

This doesn’t mean there isn’t a lot you can still be doing to avoid enormous amounts of debt.

2. The First Financial Aid Package Offered Is Not Set In Stone

Colleges offer financial aid packages and usually cram them full of loans because they know that most parents aren’t going to look to negotiate a better deal.

Of course loans aren’t really “financial aid” at all as students have to pay that back with interest later on so all offers from schools should be considered “first offers” only.

Like in any negotiation, there’s always room for improvement and whilst discounting your college bill by a few thousand dollars a year isn’t a big deal for them, over the 4 years your child is at college it’s a huge amount of money that never needs to be paid back.

3. Draining Your Retirement Savings To Help Your Children Financially

Dipping into your retirement funds to help your children isn’t always the right thing to do.

The sentiment behind it is great, but parents don’t deserve to be working well into their seventies and delaying retirement any more than their children deserve to be buried in debt.

A better way to help your children is to help them make better decisions. Choosing schools that are known to be financially generous and working with them to make sure your family is on the hook for the least amount of money as possible.

If they’re already enrolled in college, then doing something like contacting the financial aid office a month or two before the new year starts can secure you more grant money for that year as by this stage, schools already know how much funding they need to give away from their budget that year and more often than not, there’s additional funding available.

4. Turning Getting Private Scholarship Money Into A “Science”

If you’re under the impression that you need a superstar student or an athlete to win a lot of private scholarships then you’re wrong as there’s vast amounts of money available to students for many different reasons.

Location, ethnicity, family income, religious beliefs, career location and sometimes, just knowing someone at the right company are often enough to win thousands in scholarship money.

It’s really just a case of turning applying into a “science.” Use the right formula, apply for many and you’ll start to see success.

5. Avoiding “The 6 Year Disaster”

It’s a fact that six out of every ten students now take six years to complete their major and this is a disaster for a number of reasons.

First, they’re entering the job market two years later than planned which means two extra years of building up tremendous amounts of debt instead of two years of earning a living.

Second, there is very limited financial help available to students in years five and six. Grant money, merit aid, private scholarship money usually disappears if additional years are needed which means all that extra tuition, housing, travel (and the rest!) needs to be covered with loan money.

Nothing puts students in serious amounts of debt faster than this so take a look at ways to earn more affordable credits that go towards their major either whilst they’re on campus (an extra class earns credits) or over the summer.

6. “Marketing” a Student’s Attributes For Financial Rewards

Parents need to understand that schools want to find the most outstanding students. When you understand this and “market” (present) your student in the right way, it can be very financially rewarding.

This is just one of many ways to take the fact that you earn too much to qualify for financial aid on paper so pay special attention to how your student demonstrates their attributes when you’re going through the application phase.

7. Not Taking The Time To Plan Smartly For Finding The Money

Regardless of whether you’re one, two, three years away from your child entering college or you already have a child on campus, taking the time to plan carefully is a must as you’re on the hook for an amount of money that’s bigger than most mortgages.

Many parents rely on the advice of school guidance counselors, financial aid administrators and financial planners, but they may lack the experience required to save you serious amounts of money.

This means you’re forcing yourself into a spot where loans are your only option and not only does that put you in a situation where you’re seeing your child/children bury themselves in debt — you’re also just as responsible for paying that money back should anything go wrong!

Mistakes cost you and your children huge amounts of money and affect the future of your family so if you want to avoid them and enormous debt in the process here’s what you need to do next…

Here’s How to Come Up With More Money For College & STOP Relying On Loans…

Afra Sanjari is the country’s leading expert on paying as little as possible for college and offers a step by step course, The Debt-Free College Guide, on finding the money for college without relying on loans, your retirement savings or “the system” to help you.

If you want me to give you more information about it (highly recommended) and take advantage of the special discount that’s on offer to UniversityParent readers, then click the link below, add your name and email and I’ll send you the details right away!

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