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Would you believe that 60% of students looking to fund school this fall with student loans still don’t have a handle on where those funds will come from?
That number comes from a new student loan survey funded by TuitionBids.com which queried more than 500 parents and students.
Changing College Plans
The economy has made this year a challenging one for some college-bound students. Never before has the college community seen so many students changing their minds about which schools to attend (some had even sent in deposits to more than one school).
It seems that many families simply don’t know if they can afford to send their student to their school of choice. The TuitionBids survey confirmed this with its findings that 56% of parents and students polled felt sure they would have to change their college plans if their loans didn’t come through. Worse yet, 66% admitted that they underestimated college costs in the first place.
An Increasingly Confusing Loan Market
Unfortunately for families, the credit crunch has made the student loan market increasingly confusing. It’s no wonder parents don’t know where to turn with colleges referring students left and right to different (and questionable) lenders, private lenders trying to push their alternative loans, and commercials advertising private loans that don’t deliver the funds they promise!
If your family is among the many who still hasn’t decided on a student loan, you might want to take a peek at this article about the FTC’s Consumer Safety Student Loan Guide.
Preparing for what’s Ahead
If your child is still a year (or many years) away from college, now is the time to start preparing for college costs. Here are a few ways you can get yourself and your family ready for the added expense of higher education:
1. Know the Industry. Start doing research now on college prices (so you don’t get a shock), the admissions process, various sources available for college funding and understand the dos and don’ts of student loans. Attend college fairs and info nights at your child’s school, too. When your child is in high school it is a great time to get in touch with a reputable college planner who specializes in “late stage” college planning and can help you prepare your finances for college.
2. Save, save, save. If you have time to save, do it! Get help figuring out what type of college savings vehicle would be appropriate for your family’s situation. If you’re getting close to the tuition due date, make sure you keep your savings in a conservative place to protect the principal.
3. Think Outside the Box. The foundation of my college planning business is the ability to think outside the box-to uncover both conventional and unconventional tactics to reduce the cost of college and to walk families through the college funding process so they can pay for college and still save for retirement. When you start considering how your coffee intake could affect your college fund, and how tax reduction strategies, academic planning and cash flow efficiency can lower the cost of college, you’ll have a good chance of significantly improving your family’s finances.
All the best,
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs