What does $35,000 in student loan debt do to a new college graduate?
Sometimes it means living with their parents, which can seem like a financial leash to both the graduate and the parents.
For most of the graduates living on their own, they have to continue living on a college budget (or tighter) just to get by without having to take out more loans.
Basically, what a student imagines their life to be after college – being able to afford their own car, rent, paying off credit cards, traveling, “life” – is often an illusion.
The effect this has on our economy is profound. But for most families, it simply means being saddled with having to pay off college loans for decades.
And in that time frame, it makes it harder to do things like start saving for (future) children’s college education (so they don’t have to live their lives in the red).
That’s why it’s smart to know all your options, including some of the best ways to prevent yourself or your college-bound teenager from amassing a crippling, decades-long debt.
In fact, the best answer is simpler than people would expect: proper financial planning.
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Specifically, that means defining and setting into action your overall financial planning goals. To do this, you need to know not just how much you need to save, but the best ways to save.
For example, it’s commonly assumed that 529 College Savings Plans are the best ways to save for college.
While they do offer a handful of benefits, more and more they lack safety, certainty, and liquidity.
That’s because 529 plans are subject to the mercy of the stock market – the ups, the downs, the runs, the droughts. Most especially, the unpredictability.
Not to mention the money in a 529 plan could possibly count against you when you go to apply for financial aid.
With each year, you don’t want to put outside forces more in control of your ability and capacity to pay for college.
But the way things in Washington D.C. have been going the past 4 years, who really expects a happy ending to this nightmare scenario?
With so much at stake, more families are becoming aware of the risk of letting outside forces dictate how much debt is waiting on the other side of their child’s college degree.
That’s why it’s important to speak with an experienced College Funding Advisor who can provide a variety of options that fit your comfort level.
Remember, the sooner you can get to work planning for college, the sooner you can make your college savings go farther.