It is an unfortunate fact that sticker shock is going to be a major part of the college application process for many families. Not only does the price of tuition continue to go up, but college towns are notoriously pricey, and living expenses could as much as double the overall costs of higher education.
In order to avoid sticker shock and steer clear of any financial pitfalls, here are some simple methods that families can keep in mind to make this process as stress-free as possible.
Starting early may seem like an abstract or vague concept, but simply thinking about higher education well before the application process will help families deal with any major shock. Not only should parents and their children be looking at current college prices, but they should also be exploring a handful of forecasts on what future expenses will be. When it comes to saving for an investment as large as a college degree, having the right figures in-hand as early as possible could make all the difference.
Explore Post-Graduation Forecasts
Almost everyone has heard the horror stories about college students that graduate with an overwhelming amount of debt and cannot get a job, and this is one of the reasons that so many fear those large numbers when looking at universities. Instead of planning for college as the end result, parents and their children should think of it as a single step in a much longer process. Students want to start considering their major, extracurricular activities, internships, and college jobs early on so that things don’t seem so bleak come graduation.
Don’t Waste Any Extra Income
One tip that almost every financial specialist will give a family that is preparing for college is to not squander any secondary income that they might receive. From yearly work bonuses to personal injury settlements, everyone should pick a percentage that they are comfortable with and put that towards their child’s higher education. For children that have received birthday gifts such as bonds in the past, it may be time to explore other savings options that have a higher return on investment (ROI).
Four-Year Universities and Colleges Aren’t the Only Option
When most students think about college, they dream about leaving for the dorms after graduating high school and heading directly into a prestigious school, but this is no longer a practical option — or even the best option — for most families. While the social aspect of “heading off to school” is important, families must balance that with the practicalities of higher education. Some students may find a better fit in a two-year college in order to get their general education classes out of the way. Simply heading off to a four-year university because it is expected of a student could be a financial mistake that will haunt them for 20 years or longer.
A college degree remains a great investment for many professionals, but this does not mean that families need to head into this process blind. A little research and planning will help families make informed decisions about the student’s future.
Disclaimer: Dolphin Asset Group is not allowed to provide tax or financial advice. All information contained herein should not be construed as such. Readers are advised to seek independent advice from a qualified professional.