So, you want to go to college, but can you afford it?
While there are many motivating factors towards continuing your education (moving out of your parent’s home, pursuing your dreams, finding yourself, etc.), one factor that comes into play for the majority of students is financial well-being.
Even in our recent economy, studies show that college graduates have lower unemployment rates and higher income. National averages can be found on the United States Department of Labor, Bureau of Labor Statistics website.
In the long run, based on these national averages, attending college should be financially beneficial. In the short term, you need to learn to approach college as an educated consumer. Taking out large student loans can hold you back from other life pursuits for decades, whether you earn that college degree or not. Your educational and career goals can be achieved without putting your future financial health at risk.
Where should you start?
Step One – Determining your Personal Resources
Have you spoken to the people in your life who will be involved in your educational and financial choices?
- Spouse or domestic partner
- Other extended family members
- Close friends
- Your employer
- High school teachers and counselors
- Other organizational connections
- Veteran Affairs (888) – GIBILL1 for military students
You may be happy to learn that family members are willing to contribute or have been planning for your educational future. One popular investment option for college savings is the 529 College Savings Plan.
*529 College Savings Plans are qualified tuition programs set up by states and educational institutions where student educational costs can be paid in advance. Tax benefits include no tax on distributions if they meet requirements. See the IRS website for more detailed information.
Of course, not every student has the opportunity to rely solely on their family to pay the way. That doesn’t mean that your family may not be willing to contribute something, even if it is a small amount, or just the possibility of relying on a family member for housing while you attend college. If you are currently working, your employer may offer tuition reimbursement options or scholarships. If you are active in any volunteer organizations, they may offer scholarships as well.
Once you have a good idea of the resources available to you as you begin your college education, it is time to put together a realistic budget.