According to a recent Sun-Sentinel article, college students are racking up credit card debt to pay for their education. 30% charge their tuition compared to 24% in 2004. 92% of undergrads charged textbooks, school supplies and other educational expenses compared to 85% in 2004.
Marie O'Malley, director of consumer research for Sallie Mae, thinks families are underestimating college costs and opting for more expensive credit card debt in lieu of applying for cheaper financial aid.
"Too many students are at risk of overpaying for college by pulling out credit cards...instead of using less-expensive financial aid..." said O'Malley.
Duh! Sound familiar?
"College Pete" and I have been warning about this, broken record-style, for years. Why don't parents apply for financial aid? Put another way, why do 53% of all eligible families not bother to apply?
One reason is intimidation. You "need a PhD" to figure out the FAFSA, according to Secretary of Education Arne Duncan. The forms are annoying and a pain the in the rump, with multiple land-mines to stumble on and blow up all chances of aid.
Another reason is that parents put off their college planning until it's too late. The best time to start the college planning process is the second half of sophomore year, junior year at the latest.
What are the consequences to your children if you don't take this seriously?
One FAU graduate who maxed out his credit cards to pay for college fretted, "I wonder if I'll ever be able to get a home...with the debt I have now and the marks against my credit."
On a personal level, I’m extremely sympathetic to this student as I racked up $100,000 in debts between undergraduate and law school. My wife and I have four children and have sworn a blood oath to never put them through what I had to endure. That’s why I’m in the college planning business.
So learn about the financial aid process while there is still time to do something about it!
Andrew Lockwood, J.D., and Peter “College Pete” Ratzan, M.B.A., co-authors of the book, Never Pay Retail for College, conduct free college funding workshops throughout South Florida. Topics include: How even millionaires can save 20% off the cost of college; Think you make too much money to qualify for financial aid? You're probably wrong, dead wrong! And, Can you legally "position" yourself to receive more financial aid? More information is available at: www.CollegePlanningAdvice.com/events.
No comments:
Post a Comment