Student loans and financial aid are critical to pay for college. In this episode, The Money Answer Man, Jordan Goodman, explains if you should take loans in a student’s name, parent’s name, or from grandparents. If you want a high quality education, but don’t want to get into big debt, Goodman has the answers for you.
“It’s changing society. The average person graduates with $30,000 in undergraduate student loan debt,” says Goodman. Graduate school or special degrees cost even more.
“Financial aid is a burden, not a privilege!” states Goodman. It is imperative to begin saving as soon as possible. By junior or senior year of high school, a large portion of college tuition should already be saved.
Where people are getting money to pay for college:
When choosing a college, there is an emotional aspect and a financial aspect to consider.
“Ultimately, the payoff should be if you would get a better job, have more income, and have a better life at the higher end college,” explains Goodman, “For some people absolutely, “Yes,” but for a lot of people the answer is, ‘No’.”
It is difficult for a high school senior to determine clearly what their career path will be. College is an investment in the future. Consider the payoff before taking on a large amount of debt.
Most students can take on about $30,000 of debt themselves.
“Anything after federal loans you start to get into private loans which are much more expensive,” warns Goodman.
When you get out of school, here is what you can do:
Parents usually cannot shift the debt they take out back to the kids. Have students take as much as they can themselves. Goodman shares, “I’m unhappy with parents sacrificing their own financial futures for their kids.”
Parents Can Minimize Their Risk
Lots of options that parents can do:
“If you can qualify for scholarships, it is money you don’t have to borrow from other places,” notes Goodman.
Schools themselves often offer scholarships. There are quite a few out there, some of them very specific, and they can sometimes be quite unique. Find these and apply to them all.
Higher end schools with lots of demand can keep their prices high. The biggest change has been foreign students coming to get a prestigious American education and they can pay these higher costs.
One thing that is changing is online education, which is a definite alternative. “You can get a perfectly good education online,” suggests Goodman, “Much cheaper than going away to school.”
“People don’t realize if they are accepted into a school, they have bargaining power,” describes Goodman.
You can ask for:
This is especially useful to do if you have been accepted to more than one institution. Colleges are competing for students, and you can use this to your advantage!
Bargain with the admission office and financial aid office. Ask them what they can do for you. “It’s almost like bargaining for a car,” compares Goodman, “Play them off each other and get yourself the best deal!”
Goodman is a regular guest on many radio shows and has his own show “The Money Answers Show”. He happily answers questions via these shows and email to help families with the difficult decisions around paying for college.
“It is very easy to borrow, but the paying back part is a real problem for a lot of people,” notes Goodman. People are becoming more aware of this and are being more cautious about the debts they are taking on.
We are starting a new video series called, “The Scholarship Guide for Busy Par-ents.” It is going to be 4 videos that are 12 minutes or less complete with cheat sheets and other resources to help you find and win scholarships. If you are inter-ested in learning more about scholarships please visit:
www.tamingthehighcostofcollege.com/scholarships
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Brad is not affiliated with Money Answers or Jordan Goodman.
The post THCC69 – Understanding Student Loans with author Jordan Goodman appeared first on Taming The High Cost of College.
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