by
Carl Hampton
08/04/2006
In a recent survey, 300 parents of
school-age children were asked to list in
order the fears which inspired the most
horror. Believe it or not, the high cost of
college tuition came well above the safety
of their family, terrorism, and crime.
Most of the so-called experts seemed
somewhat surprised by these results. Not me.
I've received a great many letters over the
years from parents on the subject of
“Student Loans” and the hardships they
have caused these families.
As a rule, I have always advised these
parents to max out their retirement accounts
before they consider saving for college
fees. After all, there is little or no
financial aid for retirement, but there's
plenty of help for college fees once you
know where to look. So why is it as rational
adults, we can and do understand from a
dollars-and-cents perspective that this
advice is perfectly correct, but as parents,
we seem more than a little uncomfortable
with it.
Student Loans are big business and there is
no shortage of companies out there willing
to lend you the money required to pay these
fees. The average cost at a public college
is around $12,127 a year, according to the
College Board, and at the private
institutions they can average as much as
$40,000. So how do we as parents reconcile
these two conflicting forces tugging at our
savings and our conscience?
Lets try and find some middle ground for
this problem. After all, who wants to live
with that nagging feeling that we are
somehow neglecting our children by not
making any effort to save for the education.
We should aggressively seek out grants.
Kalman Chany, author of "Paying for
College Without Going Broke," notes
that many people fumble their chances for
more aid by waiting to apply until after
they've done their taxes or after their
children have been accepted to a college. By
that time, many work/study and other
campus-based programs are tapped out. At
virtually all schools, the earliest
financial aid deadline falls before
acceptance letters are even mailed out.
According to the American Council on
Education, more than 1.5 million students
who could have qualified for Pell Grants - a
form of financial aid that doesn't have to
be repaid - didn't even bother to apply.
Most public data suggests that's not all the
money that's being left on the table. To see
if your child is eligible for grants go to
studentaid.ed.gov
There are a large number of reward programs
out there that will put money into your
tax-deferred college savings account as a
thank-you for shopping at certain retailers.
It may only be small amounts, but it's free
money that's not coming out of your pocket.
Two of the most popular are Upromise and
Littlegra, both of which have websites that
are well worth the visit. Ben Kaplan,
publisher of ScholarshipCoach.com, was
awarded $90,000 in scholarships when he was
applying to college in the late 1990s.
"It helped me immensely to know that my
family couldn't pay for my whole
education," he says.
There's a lot of research out there that has
shown that success in life has much more to
do with our children's overall ambition than
where they go to school. This is a point you
may want to think about when deciding
between an Ivy League school, along with the
six-figure loan that goes with this route,
and a public school with a largely free
ride.
Don't get ripped off trying to find
scholarships. The fear of high college
tuition bills leads a great many families to
shell out for something you don't need. Stay
away from the pitch "Pay us to search
our vast database and win you a scholarship
- and we'll apply for you!" Generally,
you shouldn't have to pay to find or apply
for any scholarship. There are plenty of web
sites out there that have searchable
databases that you can scour for
scholarships and grants absolutely free.
Have an opinion or a question you would like
me to answer, then write me!
http://www.CarlHampton.com
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