College Financial Planning

College Financial Planning
Our college of financial planning guide…

When it comes to paying for your child’s college education, I get mixed opinions on how this should work. Many parents I talk to have very strong and differing opinions about how their children’s higher education should be paid for. Some believe that if their child wants to go to college then they are going to have to find a way to pay for it, other feel that a higher education is necessary and they in turn want to pay for college, and finally there is the middle of the road approach and both the parents and student split the bill.

If your child is lucky enough to get a full ride scholarship or financial aid to a college or university then you are one of the few very fortunate parents. With the rising costs of college tuition it’s getting harder to justify paying for your child’s college education, so should you?

Some parents feel that it is the responsibility of the pupil to pay the bill. If they don’t have the money then they should get student loans to cover the costs of a higher education, after all most parents aren’t financially secure enough to cover their own expenses.

Other parents realize the importance of a college education and will go out of their way to fully fund the expenses of a degree. They want their children to be a success in life and it’s important that the provide for them financially.

A third approach is for the parents and student to split the financial burden of college. This is how my wife and her parents decided to split the financial side of college. My wife graduated with about $20,000 in student loans and her parents owed about the same amount. I somewhat favor this method; however, I feel that eventually when we get her loans paid, I would like to help them finish paying back their debt.

If you choose to pursue the second or third approach for college financial planning then it is best to get started as early as possible. There are many great ideas to help you plan for the future. Starting early will save you a lot of pain down the road. For example putting $15 per week into a good mutual fund earning 10% average per year will yield over $28,000 in 16 years! A great chunk of a 4 year public university. There are also 529 plans to help you save for college. If you like free money there are also many scholarships that go unclaimed every year. Do some research when you children are young and it will save you a lot of money and grief in the future!