College Costs: Plan Smart or Pay Later

Now that you’ve completed the FAFSA, or perhaps you're planning to complete the FAFSA next January, it might be a good time to have a conversation with your nearly college-age student about trade-offs and budgeting. Now (or perhaps even yesterday) is the time to discuss the trade-offs in life concerning income-earning potential versus the cost of college.

It’s great to attend an Ivy League school for the status and networking potential, but there is a cost. Are you comfortable with your child exiting college with possibly over $200,000 in student debt for a course of study that may offer a low probability of income-earning potential, making it challenging to pay off the debt in a reasonable amount of time? Opting for an engineering degree at $30,000 per year in tuition can involve very different calculation compared to a liberal studies degree at $75,000 per year in tuition—and both can lead to very different outcomes.

You want to send your child to college to enhance their education, knowledge, and income-earning potential so that when they enter the world, they can thrive. Discussing good business decisions could be the best way to save both you and them a lot of strife down the road by setting appropriate boundaries and expectations. Then, once you’ve narrowed down the course of study, I can help you with tax-advantaged savings strategies to pay for it—but ideally, that should have started when they were born.