Some believe that parents should be fully responsible for paying for their kidâ€™s education. That means that parents are responsible for saving a sufficient amount of money to fund the future education of their child. If they haven't done that, then they have to borrow the money themselves to fund the schooling.
On the other side of that coin are the people who feel that the student should cover every aspect of her expenses, even when mom and dad have the ability to assist her financially. Some feel this helps the student build her character, whereas others just don't want to change their current lifestyle. These students often don't have any assistance from financial aid and have to take out enormous loans to get their degree.
So what's the right answer? What should you do if you're planning on attending school soon? Rely on mom and dad? Or get a job or three?
Four Things to Remember:
- Be realistic
More thanÂ 70 percent of parentsÂ believe that their child will be talented enough to win scholarships for their continuing education. This would mean that only 30 percent would actually have to pay for college. This is an unrealistic point of view, especially when you consider the numbers. Two thirds of college seniors graduated in debt, with an average of $25,250 owed. Chances are, those kids didn't get the full ride they were expecting. CertainlyÂ apply for scholarships. If they happen, great, but you should not count on them. You should be prepared to spend your own hard-earned cash.
- Make the Necessary Sacrifices
Parents are used to making sacrifices to give their children a better life, so kids may expect their parents to stop taking vacations or dine out less often to save money for their future schooling costs. You shouldn't, however, expect your parents to eliminate their retirement fund to pay for your future. It's fair to expect help from your parents, but not to drive them into bankruptcy.
- Separate Your Wants & Needs
Needs always trump wants. Imagine you are accepted into two colleges. One is the local university and the other is a very prestigious, but expensive, private institution. If you have unlimited funds, choosing the prestigious school is an option for you. On the other hand, if your family is just scraping by, the local university will have to do. If you're getting a business or law degree, maybe you can afford to go into debt in order to graduate from Harvard, but if you're going intoÂ art schoolÂ or creative writing, the returns simply may not be as great. You may want to gauge the amount you spend by the amount you can expect to make at graduation.
- Remember, Turnabout is Fair Play
If your parents raid their retirement savings today to help pay for your schooling, you may end up supporting them in their golden years. That may not sound so daunting now, but just wait until you're paying for yourÂ ownÂ kid's education and the mortgage on your parents house.
Paying for College with Loans
- Government-Backed Loans Offer Lower Interest Rates
Students generally rely on the fixed-rate,Â government-backed loansÂ for undergraduates. Interest rates usually range from about 3 percent to 7 percent, depending. Parents also have the ability to take out a federal loan at about 8 percent. This loan can be as much as the cost of attendance, minus any financial aid the student receives.
- The Government Gets Involved
The government has recently been paying closer attention to private-lending practices. In fact, Congress and the Obama administration is looking to assist students with avoiding predatory high-interest loans offered by many of these private lenders.
Illinois Senator, Richard Durbin, stated during a telephone interview that 19, 20 and 21-year-old students are making decisions that will haunt them for the rest of their lives by sending themselves so deeply into debt. Durbin and Iowa Senator, Tom Harkin, introduced a bill in March that requires colleges to counsel students on taking out all the federal loans they can prior to inquiring about private loans.
- Be Creative and Use Your Strengths
You're never going to get that swimming scholarship if you're a terrible swimmer. Before you start applying to scholarships and grants, it's important that you take honest and realistic stock of your talents and activities that college review boards will value.
For example, Hollis Owens purchased a black Labrador retriever named Sky. After completing several dog courses, she entered Sky in to theAmerican Kennel Clubâ€™s competitions. Today, Sky does not need a leash and is a certified therapy dog. Hollis received a scholarship from the American Kennel Club, totaling $1,000 a year. Twenty-eight students received these scholarships for their involvement in the club and their grades.
Be sure you tap all your resources when it comes to possible scholarship money. You may not think that your experiences in the school play or the newspaper amount to much, but there are many organizations that value those experiences.
Ultimately, who pays for your art school, your studies at Harvard Law, or your partying is a family decision, but nobody should have to feel like they're doing it alone. A balance of contributions from a number of places, including your and your parent's own pockets, the federal government, and private scholarships, is the best way to go when finding funding. If you can convince your parents to help, that's all the better for you, but remember that this undertaking is your responsibility as well: you've got to shell out some cash too!
ARTICLE BY: Carla Richman