Student Debt Looms Large
While this September many college students will rush off to begin their freshman years, for those seniors who will graduate in May, the reality of huge student loan debt looms large. Unfortunately, someone has to foot the bill, whether it is the student who graduates with tens of thousands of dollars in debt or dear old Mom and Dad. Student loan debt has reached astronomical proportions.
According to an article in Sacramento Bee the rate of debt is at crisis levels:
Student loan debt, as everyone knows, has reached jaw-dropping proportions: more than $1 trillion, by the government’s latest estimate.
Obama Examines College Value v. College Cost
While as Americans, we all certainly believe in the value of an education, have we missed the mark when bright, young adults, ready to conquer the work force, are graduating saddled in debt? One might ask: is it time to reevaluate college tuition v. potential post college earnings? Well, according to a CBS News report, President Obama is asking that very question. Mr. President announced in August that he will implement a national college financial aid rating system with a proposed deadline of 2015. This system would rank colleges based on four factors: loan debt, median tuition, graduation rates and post-college earnings. Obama spoke to college students at a speech at the University at Buffalo where he said:
…in the face of greater and greater competition, in a knowledge-based economy, a higher education is more important than ever…the single best investment you can make in your future, but the high cost of education has been a barrier and a burden for too many American families.
Ways to Cut College Expenses
In light of this collective reevaluation, The Sacramento Bee offered some great tips to start college students off prepared and cognizant of simple ways to stay within a budget. Here are some highlights:
- Daily Spending Tracking
Keep computer records or a file of receipts. At the end of the month, take stock and get real with how much you are spending. Can you cut anywhere? Switch out your Grande Mocha for a Tall perhaps, or skip it altogether and make your own coffee. See where you can cut back.
- Bank at the Student Union
Many university credit unions offer student friendly checking accounts, with perks like low or no monthly fees and more. If your university doesn’t have a credit union, many local banks have student account incentives. Do your research.
- Avoid the Credit Trap
Try to use your credit card for emergencies only. If you can’t pay for it, skip it. According to The Sacramento Bee report:
In 2012, the average college undergraduate was carrying $3,173 in credit card debt, according to Federal Reserve System statistics.
- Student Discounts
Use your student ID at movies at car rentals and ask about a student discount. Take advantage of your present status. You may as well. You are paying for it!
- Community Plan Please!
If you are the parent of a soon to be college Freshman, get you child enrolled in some community college classes now for which the credits will transfer. This can add up to a ton of savings down the line. Or if already enrolled in college, think about taking community classes during the summer.
- Show Me the Money!
There are scholarships just waiting to be used even if the student isn’t exactly considered Einstein. The money is there just waiting to be claimed. Talk to counselors, go online, and check with your preferred college if they offer scholarships. According to the Bee, good resources are FastWeb.com and Scholarships.com.
The Smart Money Plan
If you are lucky enough to be reading this now and your child is nowhere near approaching freshman year, now is the time to plan with your accountant. Protect your little future Harvard grad by setting up a solid college savings plan with the help of a dedicated Certified Public Accountant. Planning now will grant you the peace of mind you need and open the world up for your child’s future. Call Joel Lewinson for a consultation today at 818-693-6777.
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