How to prepare for and tackle unexpected college costs
StatePoint Media | 7/31/2019, 11:13 a.m.
(StatePoint) Smart financial decisions can help your family make good college investment decisions. Unfortunately, unexpected costs throw many families for a loop. To plan realistically, consider the following:
• Pad Your Budget: Many college expenses are variable -- from fun stuff, like entertainment and trips, to the serious, like books, supplies and other educational fees. Pad your budget in case these costs are larger than anticipated.
• Look Beyond the Letter: Those receiving financial aid from their school should look beyond their Expected Family Contribution (EFC). Forty-three percent of parents of college students nationwide report paying more than their EFC, according to a recent survey by College Ave Student Loans and conducted by Barnes & Noble College Insights. The bright side? Of those families that received financial aid award letters, 17 percent appealed, with 58 percent of those parents successful in receiving more aid from the school.
• Stretch Book Budgets: The cost of textbooks and supplies often surprise families. While the exact amount is unpredictable, the College Board reports that the average student spends $1,240 each year on course materials. Purchasing used, renting or downloading textbooks electronically are all smart strategies for reducing costs.
• Grow Your Budget: Families surveyed were nearly split on whether a child helps pay for the cost of college -- 49 percent said yes, 51 percent said no. Having a child kick in can teach responsibility and grow your overall budget, whether that contribution comes in the form of a part-time job or a work-study program. Another substantial way a student can help is by reducing or even eliminating housing costs and becoming a resident advisor.
• Borrow Strategically: If you need to borrow to pay for college, first take out federal loans in the student’s name, which carries special benefits, such as public service forgiveness and income driven repayment options not typically available on private loans. When federal loans in the student’s name don’t cover you fully, determine whether private student loans or private parent loans may be right for you and your family. Those from College Ave Student Loans, for example, are available at competitive rates and feature a wide range of repayment options. Its customer-friendly experience -- from application through repayment -- takes some of the stress out of the equation.
• Control Loan Costs: You can reduce the overall cost of a loan by starting to make payments while in school, even if it’s only a small amount. To see the impact that various repayment options have on total loan costs, use the student loan calculator available at collegeavestudentloans.com.
“Whether parents are advocating for more financial aid, helping create a budget or helping pay off loans, their support serves as a cornerstone in many student’s financial plans,” says financial industry veteran Joe DePaulo, CEO and co-founder of College Ave Student Loans. “Being realistic and having a plan can help families face both the expected and unexpected costs of college.”