Changing Economy Changes College Plans
Posted 02 Apr, 2009
A new survey released by Eduventures shows that at least 1/3 of families with college freshmen expect the recession to affect their financial plans to pay for college. The incoming college class of Fall 2009 faces a harder economy than we’ve seen in decades, and unfortunately it seems to be seriously changing the face of college plans for many students.
Changing Loans
The recession has forced many changes in college funding, not the least of which are some serious changes in student loans.
As I have written before, the Obama administration is looking to eliminate the popular Federal Family Education Loan Program (FFELP) , a federal loan program which offers federal loans through a network of private lenders. This has allowed students to “shop around” for the lenders who offered the best incentives, such as interest rate discounts and loan origination fee waivers.
Even the face of private student lending is changing: Until now, student loan repayment is deferred until a student has graduated college, but big time lender Sallie Mae has proposed a change that would require some students to begin paying back their loans while they’re in school.
Changing Plans
According to the Washington Times, students are scaling back on pursuing college dreams now more than ever. Those who might once have pursued a degree away at a four-year university are instead living at home or attending a community college. Other students are taking on more hours at their jobs, or transferring from private schools to less expensive public colleges.
What Should You Do?
Most parents would likely agree that it in today’s job market, it is essential to earn a college degree to have a shot at the best job offerings. That’s why many parents attempt to help their children pursue a college education at any cost. However, even in the current economic climate, students may not have to resort to the cost-cutting action mentioned above.
I’ve recently discussed the downside of attending community college first , as well as the best way to know if your student is ready for a job, but I believe the best way to decide what is best for your family is to consult a competent college funding specialist. Get a referral to someone who is a financial planner with extensive training in working with parents with a college-age or college-bound high school student. And find someone who will work with you on a hourly or flat fee basis. The right individual should be able to objectively analyze your family’s situation and offer you various type of cost-cutting strategies, both conventional and non-conventional.
The key is to develop an individualized college funding plan based on your specific situation. On this blog I have discussed literally dozens of ideas of how to reduce your college costs. However, a particular strategy can be totally worthless unless it is relevant to your family and implemented in the context of your family’s overall college funding plan. An effective plan is created when you combine and implement a multitude of strategies over the years you are paying college expenses. Over the past ten years as a college planning specialist, I have found that parents who become the best educated about the college funding process and those who develop a concrete plan on how to best pay, in most cases end up paying significantly less for their children’s college education than parents who have not put out that same effort.
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs.
photo by woodsy
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A new survey released by Eduventures shows that at least 1/3 of families with college freshmen expect the recession to affect their financial plans to pay for college. The incoming college class of Fall 2009 faces a harder economy than we’ve seen in decades, and unfortunately it seems to be seriously changing the face of college plans for many students.
Changing Loans
The recession has forced many changes in college funding, not the least of which are some serious changes in student loans.
As I have written before, the Obama administration is looking to eliminate the popular Federal Family Education Loan Program (FFELP) , a federal loan program which offers federal loans through a network of private lenders. This has allowed students to “shop around” for the lenders who offered the best incentives, such as interest rate discounts and loan origination fee waivers.
Even the face of private student lending is changing: Until now, student loan repayment is deferred until a student has graduated college, but big time lender Sallie Mae has proposed a change that would require some students to begin paying back their loans while they’re in school.
Changing Plans
According to the Washington Times, students are scaling back on pursuing college dreams now more than ever. Those who might once have pursued a degree away at a four-year university are instead living at home or attending a community college. Other students are taking on more hours at their jobs, or transferring from private schools to less expensive public colleges.
What Should You Do?
Most parents would likely agree that it in today’s job market, it is essential to earn a college degree to have a shot at the best job offerings. That’s why many parents attempt to help their children pursue a college education at any cost. However, even in the current economic climate, students may not have to resort to the cost-cutting action mentioned above.
I’ve recently discussed the downside of attending community college first , as well as the best way to know if your student is ready for a job, but I believe the best way to decide what is best for your family is to consult a competent college funding specialist. Get a referral to someone who is a financial planner with extensive training in working with parents with a college-age or college-bound high school student. And find someone who will work with you on a hourly or flat fee basis. The right individual should be able to objectively analyze your family’s situation and offer you various type of cost-cutting strategies, both conventional and non-conventional.
The key is to develop an individualized college funding plan based on your specific situation. On this blog I have discussed literally dozens of ideas of how to reduce your college costs. However, a particular strategy can be totally worthless unless it is relevant to your family and implemented in the context of your family’s overall college funding plan. An effective plan is created when you combine and implement a multitude of strategies over the years you are paying college expenses. Over the past ten years as a college planning specialist, I have found that parents who become the best educated about the college funding process and those who develop a concrete plan on how to best pay, in most cases end up paying significantly less for their children’s college education than parents who have not put out that same effort.
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs.
photo by woodsy
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