Parents Report: Saving for College is not Easy

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With tuition costs soaring ever higher, parents have discovered that saving for a college education is tough, much tougher than expected. 

According to a recent Student Loan Hero survey, less than one-third of parents believe they’ll be able to cover the cost.  The vast majority of those polled are finding it tough and more than half wish they had saved more.

The survey found that:

  • Nearly 80% say saving for their child’s education is much harder than anticipated.
  • 43% feel guilty they haven’t been able to save more for their child’s education.
  • Nearly 36% are currently paying off their own student debt while trying to save for their children’s education. (My note – they likely have a mortgage, credit card balances, auto loans, and possibly medical bills as well.)
  • Nearly 57% of parents plan to help their children pay off their student loans.
  • 39% say saving for their child’s education is a bigger priority than saving for retirement (17%).
  • For 57% of parents, their financial support comes with strings attached.

Falling short of goals creates massive feelings of guilt.

How are parents saving? 

  • 73% of parents use savings accounts.
  • 23% are setting aside cash.
  • 17% are using savings bonds.
  • 16% are using 529 Plans. (My note – for the record, there is a safer savings strategy.)

As many parents feel their savings will fall short, they are considering other options…

  • 32% plan to take out a personal loan.
  • 21% intend to co-sign a loan in their child’s name.
  • 19% will use a credit card.
  • 17% intend to utilize a Parent PLUS loan

If and how you choose to support your child and the expected expense of a college education is a personal decision.  If you are trying to save, the goal is to find the means that fit best within your family’s financial situation.

We’re here to assist you with your college planning campaign and we can help identify the means of covering the cost of an education that best fit your family dynamic.

Contact our professional college planners for assistance.  We look forward to hearing from you!

Avoid These Financial Aid Mistakes

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For families of high school Seniors, FAFSA time is almost here! 

October 1st marks the beginning of the Free Application for Federal Student Aid filing period for the 2020-2021 academic year.  The FAFSA is comprised of more than 100 questions.  Completing it will take some time.  And, yes, mistakes will be made.

Mistakes can be quite costly.  Here are a few to avoid…

Choosing not to Apply

Choosing not to apply may be the biggest and worst mistake you can make.  You may believe your family income renders your family ineligible for aid.  While that may be true for need-based aid, a family may qualify for merit-based aid. 

Before offering their own money, schools wait to see if a family first qualifies for federal or state aid.  A school won’t know whether your family so qualifies if there is no FAFSA on file.  Failure to file can leave money on the table.

Filing Late

If state aid is a possibility, filing late can result in no state-based financial aid.  State aid is limited and is awarded on a first-come, first-served basis.  Late filing could mean larger loan amounts are in the future.

Use of Incorrect Data

When completing the FAFSA, many families inadvertently include funds they consider assets but the FAFSA doesn’t.  Including such amounts generally results in a reduction in aid.  F

Furthermore, it’s possible to confuse the parent and student sections.  Doing so results in a reduction in aid, as parent’s assets and income are assessed differently than assets and income of the student. 

Surprisingly, sometimes applicants transpose numbers (e.g., incorrect social security number) or an incorrect name (e.g., nickname instead of legal name).  Doing so can delay the process, resulting in reduced or no financial aid.

If you’d like some assistance with your college planning campaign, contact our professional college planners to schedule a no-obligation meeting.  We look forward to your call!