College Financing Guidelines

Although the Congress has recently passed a bill to lower interest rates on student loans, and other laws related to college financing might get more attention during the current legislative season, college tuition fees are not going down considerably.

And this means that not any law should make parents become less thorough in tackling their kids’ college financing issues.

A Forbes feature by Jack Kopnisky about college financing presented the following guidelines for families to get the most out of their kids’ college financing planning:

Get an early start. Families should start discussing college financing at least as early as they begin to talk about the student’s academic and career goals. A logical time to hold the first conversation is when the student enters high school as a freshman.

Be informed. Both parents and students should take time to conduct research on financing options and processes before sitting down to discuss what mix best addresses their particular circumstances. Also, it is important that families seek out and take advantage of all federal aid available to them before turning to alternative financing options like private loans. Applying for federal and institutional aid requires some advance planning.

Be honest. Parents should be forthcoming about family finances and the amount they are prepared to pay for their child’s education. Interestingly, only 63% of the parents First Marblehead surveyed told their child how much they had saved for their college education, but 88% of students and 81% of parents agree that parents should be upfront about their ability to pay for college with their kids. Setting appropriate expectations early in the college selection process can help to mitigate possible areas of tension.

[image from bls.gov]