Avoiding The Burden Of Student DebtOne day it will be time for your child to walk across the stage, shake hands with the principal, and receive a high school diploma. Congratulations!!! But before that happens, you have many decisions to make. You must decide whether your child should plan on seeking higher education or going straight to the work force. If they decide to go proceed as an undergraduate, there are costs to consider. How will I pay for college? Am I prepared to help my child avoid the burden of student debt? The best strategy for handling the cost of college is to begin saving up money as early as possible. Many parents open a special trust fund on behalf of their children. Any time they come into extra money, they add it to the fund, which is set aside for the costs of a college education. This is a very efficient method that works for both well-to-do families and working class households. Consider the family with one child who sets aside $40 per week from the time the child is born until graduation. By the time it comes time to enroll the child into the university of his or her choice, the family will have saved up $37,440. With the annual cost of attending a state college being around $16,500, this is enough money to at least earn them an associate’s degree. Of course this isn’t a universal rule; it really depends on the profession. For example, attending medical school to join the nursing field will cost more than taking computer classes to become an administrative assistant. Anyway, continuing with our example: if you continue saving while they are enrolled and they get a part time job making $8.00 per hour working 20 hours a week, this adds an additional $12,480. This combined with the leftover $4,440 from the first two years is just enough to cover a third year of college. Finally, once you factor in other forms of assistance such as gov financial aid, federal and state grants, scholarships, and such, that will just about cover the rest to get them a bachelor’s degree! That doesn’t sound so bad, does it? Not so fast, you say. What if it’s already too late to begin such a strategy? What if your child graduates in just a couple of years? Don’t panic. Going to college still doesn’t mean the only alternative is student debt and heading towards bankruptcy. You should still begin saving money as soon as possible and start looking into financial aid/scholarships. It won’t be enough to completely cover the costs, but it will help. If your child’s a freshman, you can still save up $8,320 using the same formula (which isn’t a bad chunk of change). Then consider enrolling your child in a community college (which often costs after once financial aid kicks in).
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