Colleges are priced like airline tickets. Everybody pays a different price. But at least on airlines, you might get a more comfortable ride if you pay more. Paying a lot more could get you a first-class seat. Paying a little more could get you an aisle seat near the front or a seat on the exit row with better legroom.
But if you pay a higher price for a college, you won’t get any extra perks for that. Your child won’t have smaller classes or be entitled to more face time with professors just because you paid more for a bachelor’s degree than the parents of other students.
There is no academic advantage to paying more. Worse, paying more can negatively affect your overall retirement plan, which is why it’s even more important to cut your college costs.
Here is a reality that will probably surprise you: most colleges are always on sale. That is a fact.
Still, Americans owe more than $1.7 trillion in student loan debt. That’s for 43 million borrowers, according to statistics released last month by educationdata.org.
The average public university student borrows $30,030 to attain a bachelor’s degree and 2.8 million people over the age of 60 are still paying off college loans.
The growing cost of college and the resulting student-loan debt are affecting families all the way through retirement.
It used to be that homeowners planned to pay off their mortgages and live out retirement debt-free.
But a survey by national mortgage firm American Financing found that 44% of Americans between the ages of 60 and 70 have a mortgage when they retire. Nearly 17% think it’s possible they will never pay off the mortgage. Why is that? For many families, it’s the price of sending their child to a costly college.
The problem that we’re dealing with is that families often overpay for college, take on too much debt, and hurt their savings and retirement plans because they tumbled unprepared into the late-stage college funding pressure cooker.
Hi, I’m John Gigliello, Certified Financial Planner with the Albany Financial Group and you’re listening to Invest in Knowledge, a podcast about all things financial. After a life-altering health issue at 39, my calling in life became clear: To share my knowledge of personal finance with PEOPLE who are looking to make smart and responsible choices with their money. Only through education, action and accountability can YOU build the confidence and security YOU need to live a SATISFYING life.
You may be wondering, "Why is a financial professional up here today talking about college?" I do this as a service to my clients and my community because I've seen many families struggle with these issues. Getting kids through grade school and then high school is hard enough. You’ve been working and working, maybe saving for the eventual college tuition. Then, BOOM! Your kid is a junior or senior in high school and you realize you haven’t planned enough. The costs of tuition, plus room and board, are higher than you expected. Stress increases as you receive piles of slick brochures from fancy colleges and hear your friends brag about where their kids are going.
As we just discussed, this leads to poor decisions which may negatively impact your family’s financial health for years, even decades, to come. I’ve seen that happen and I want to help you before you get to that stage. Your son or daughter can go to a good school, have a great college experience, and do it without saddling any of you with undue debt. I’ve seen that happen, too.