What Should Parents Do To Ease Their Financial Load and Avoid Personal Loans When Paying for College – Part 1
One of the most intense and polarizing debates among parents and their children when it comes to choose higher education is if to choose either a public school or a private one an if it should be parents the ones who pay for it or if their children should already start taking responsibility for those costs by acquiring a personal loan or a student loan.
Obviously, given how dramatically the increases in the cost of college education have been in recent years due to the economic crisis, families have become more conscious than ever when it comes to spending money, specially when it is for something as important and as costly as their children’s education, sin in most cases this will involve acquiring a personal loan.
This is why in the course of this an our next entry, we will tae a closer look at howe families face these expenses by learning from two different case studies from the point of view of the families facing these costs and personal loans.
Case Study No. 1: Jules
Right from the start, Jules and her husband were on the very same page about the college educations of their children. They decided from the beginning that they would pay for their children’s education if their means allowed them to. In order to be prepared for that moment and to avoid a personal loan though, these are some of the things they considered more importantly.
– Retirement Situation: Deciding to pay for the education of their children will always be a very big decision, especially for the financial consequences that it has. However, there are many cases in which, due to parents wanting to give their children a worry-free education, many of them tend to take money out of their retirement funds in order to face these expenses, thus sacrificing their retirement.
This is something that should be avoided at all costs. In fact it is preferable to to apply for a personal loan than to sacrifice one’s retirement funds, specially nowadays, that a number of ways to pay for college are available besides personal loans and student loans. This provides parents with a lot of choices to figure out the best one with which to help their children face the costs of college.
It is also worth mentioning that most of these types of financial aids like personal loans and student loans offer a series of benefits when requested for educational purposes. Some of these are lower interest rates, better personal loan terms and longer periods of time to repay them.
– The Financial Role of Their Children in Their Own Education: While all children are different, Jules’ children actually appreciated having a say and playing a part in the financial role of their own education. One example could be Jules daughter, who is required to keep her GPA at a certain level for her to keep her scholarship and not need a personal loan. Other kids could also work part time and start facing some day-to-day expenses, thus lifting that financial load from their parents.
Naturally, there are parents that simply will not be able to face the education bills of their children, which will cause students to start working early on and assume those costs themselves.
That’s it for today. Keep an eye on tomorrow’s post to find out about the second case study where another family takes a different approach to facing college education costs and how applying for personal loans can affect those decisions.