You’ve been granted free access to this subscribers only article.
Four things parents should know before paying for college
From $20,000 to $65,000 a year -- that’s the tuition cost for one year of college, said John McDonough, a money expert who helps retirees and parents plan for their families’ futures.
“For the 2012-13 academic year, the average cost for an in-state public college is $22,261. A moderate budget for a private college averaged $43,289,” said McDonough, CEO of Studemont Group College Funding Solutions, www.studemontgroup.com. “But for elite schools, we’re talking about three times the cost of your local state school. Either way, your kid’s higher education can easily shoot into six figures after four years.”
Along with worrying about rising tuition prices, parents also fear for their own futures if their retirement savings are drained by children’s college costs, McDonough said. Only 14 percent, for example, are very confident they’ll have the money to live comfortably in retirement, he said, citing a 2012 survey by the Employee Benefit Research Institute.
“Families feel they’re faced with conflicting goals, but there are numerous ways to pay for college while investing in your future retirement,” said McDonough, who offers insights for parents to keep in mind while planning for their child’s education:
•The ROI of a college education: At a time when so many American families are financially strapped, college is an especially stressful topic because parents know higher learning will help their kids succeed. College graduates earn 84 percent more than those with only a high school diploma, according to Georgetown’s Center on Education and the Workforce. Here is how earning breaks down over one’s lifetime, based on education: a doctoral degree-holder will earn $3.3 million over a lifetime; $2.3 million is estimated for a college graduate; those with only a high school diploma can expect $1.3 million.
•Move retirement assets to qualify for grants: Most parents know about the 529 savings account, but that’s not necessarily the best or only option. Reallocating your retirement assets, such as 401(k)s, can better position a child to qualify for grants and scholarships. This legal and ethical maneuvering may be the single most important factor when considering how to pay for college.
•Know your student’s strengths and weaknesses: Consider independent and objective analysis of your future college student. Assessment might include a personality profile and a detailed search for a future career. Also think about a more nuts-and-bolts approach, including scholarship eligibility, SAT and ACT prep courses, review of admissions essays, and an in-depth analysis of chances for enrollment in a student’s top four choices of colleges.
•Make a checklist of financial aid forms: In order to maximize a fair price of higher education, remember there is plenty of data to review. McDonough recommends a checklist with a timeline and notable deadlines. Be ready to troubleshoot the “alphabet soup” of data forms: FAFSA -- Free Application For Federal Student Aid; CSS profile -- College Scholarship Service; SAR -- Student Aid Report; and more. Think about this process as a second job, or find professional help you can trust.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
The 411: Youth Archives
Baylor releases spring dean’s list (June 22, 2016)
Book it! Fourth graders become authors (June 22, 2016)
Poth Honor Rolls (June 22, 2016)
TAMU-Kingsville releases spring honors lists (June 22, 2016)
Texas A&M-Corpus announces spring grads (June 22, 2016)
Falls City Library plans summer activities (June 15, 2016)
La Vernia UIL competes at State (June 15, 2016)
Life Church plans VBS (June 15, 2016)
Stuffed animals sleepover at library (June 15, 2016)
‘Who Rescued Who’ East Central student wins Congressional Art Competition (June 15, 2016)
Falls City Honor Roll (June 8, 2016)
Karnes City High School grads receive scholarships (June 8, 2016)
Luther Thomas Elementary School honor roll (June 8, 2016)
LV Shoestring Stage Productions awards scholarship (June 8, 2016)
Poth students make a difference (June 8, 2016)
Sacred Heart Church celebrates its youth at Fun Day (June 8, 2016)
Students place in essay contest (June 8, 2016)
Take on Lego Robotics at library (June 8, 2016)
UNT names Donnell to dean’s list (June 8, 2016)
Cadets win award! (June 1, 2016)
Fertile ground for graduates (June 1, 2016)
Maker Hangout in Poth, Stockdale (June 1, 2016)
Millionaire Club (June 1, 2016)
Students go the extra mile (June 1, 2016)
Texas Nature Challenge (June 1, 2016)
Vacation Bible School in June (June 1, 2016)
Witness balloon magic (June 1, 2016)