Whether to pay for college or not? If you are planning to pay for all the expenses of your child’s education, then be ready with thousands of dollars every year. And this choice is not an easy one. How you approach your child’s education cost dwells upon your personal circumstances. Here are the five questions you should ask yourself to make the decision smarter.
- Can I afford the full costs?
Be realistic about how much you can afford. You will realize this when you will be applying for Free Application for Federal Student Aid (FAFSA). You will have to determine how much you will be contributing to your child’s education.
Here, you have to make a strong decision based on your conditions. Consider how many children you plan to have, and how much you can save without jeopardizing your own financial future.
- Will it put my retirement at stake?
It is really important not to jeopardize your retirement plans for your child’s education. A parent’s earning life is much shorter than that of their children’s. Parents should save money for the retirement during the peak earning years rather than diverting that money to pay for college.
Moreover, there are no scholarships, aids, or loans for retirement. Only save for your child’s education if these obligations are met.
- Can I go for the hybrid approach?
You really don’t need to pay for the whole education fee. Consider ways of assisting your child with education. Try:
- Paying only for tuition costs and leaves the rest for your child to earn.
- Providing a housing and meal stipend. In exchange, make your child cover the tuition fees by getting scholarships, a job, or a student loan.
There are other ways as well like giving some fixed amount of money to your child and let him decide how to use it. You can also use combinations of these strategies.
- Do I have a college savings account?
You don’t have to choose between your retirement and child’s education. If you start saving early, you will have plenty of options.
If you start saving for your retirement with your first paycheck out of school, you will have less burden later on. That frees up more money to put into college savings account, you can use a tax-advantaged 529 investment account.
- Are there ways to help without money?
One way is to cosign a private student loan and if possible go for a cosigner release loan. The latter won’t hold you responsible once your child is out of school.
Other ways are:
- Encourage your child to go to a less expensive school.
- Choose a major with higher return and your child’s interest.
- Allow your child to live at home for the duration of college.
- Encourage your child to get a part time job in high school.
- Review college options with your child. Look at the benefits of going to a community college.
- Help your kid apply for scholarship.
Every parent is not able to pay for higher education but it is possible to provide help and support to students.