This college plan never works March 6, 2016

Ian Welham talks about the college plan that does not work

Friends,

OK, quick quiz for you…

What was the #1 source of college funding for the school year just ended?

A) the federal government
B) college scholarships & grants
C) local scholarships
D) state tuition assistance
E) parents

The correct answer is E, reports a national study by Sallie Mae and market research company Ipsos.

According to the report, parent income and savings covered 32% of college costs, while scholarships and grants came in second at 30%. The remainder was covered by student borrowing (16%), student income and savings (11%), parent borrowing (6%) and contributions from relatives and friends (5%).

The study also found that families spent 16% more money on college costs this past year than in the previous year (quite a jump in one year).

One surprising fact is that 62% of families did not borrow any money to pay for college. Among those who did borrow, 75% of the total debt was taken on by students.  (Clearly, the student debt bubble continues unabated.)

Three out of four students who borrow money for college work while attending school vs. 68% of non-borrowing students. Students who take on jobs work an average of 22 hours per week, according to the report.

Here’s a thought-provoking statistic:

60% of families surveyed admitted they had no plan to pay for college. Families who do have a plan get rewarded: their students borrow 40% less than those without a plan.

The lesson is clear.

Unless you make your own plan or seek the help of a college-funding advisor, your student will pay tens of thousands of dollars more for their college education.

If you haven’t already, isn’t it time to sit down and make a plan?

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This post was written by admin on March 6, 2016
Posted Under: Uncategorized

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Ian R. Welham, Certified College Planning Advisor  -  Tel: 973.467.0101