What Should Parents Do To Ease Their Financial Load and Avoid Personal Loans When Paying for College – Part 2
On our previous entry, we took a look at how the expenses of college can greatly affect parents and families overall, with many parents opting -erroneously- to sacrifice even their retirement savings in order to pay for the children’s education when other options -such as personal loans and student loans- are available.
To get a better picture of how each family decides to face these expenses, we started by looking at the first of two separate case studies, each of them focusing in a single family and how the approach the expenses that college entails.
Let’s go ahead with our second -and last- case study.
Case Study No. 2: Erika:
Erika’s parents made it clear ever since she reached high-school that her main responsibility will always be any schoolwork she had. Other activities mattered of course, but her grades and studies had to come first. Naturally, she decided to help her parents by taking summer jobs, but during her school months all she had to care about was her grades in order to be able to secure good scholarship money as much as she could.
So Erika did just that and focused entirely on her studies and on getting great grades to keep her college costs to a minimum. One big difference between her and other students though, is that she is very aware of how costly college can be and how important it is to repay your personal loans or to stay away from them completely. This helped her be more mature about her parents’ efforts to pay for her college, which in turn allowed her to be even more responsible.
Here are two things that Erika’s parent’s -and herself- did in order to keep things under check when it comes to college costs.
– 1. Grades Are the Most Important Factor: While having previous working experience is one of the most important factors when applying for a job after college, even more important is one’s GPA. It is because of this that Erika and her parents choose to focus on her studies, which they all consider far more important than any part-time job out there.
Erika also considers hereof lucky that her parents are able to face all the financial costs of her college studies and says that when possible, parents should try help their children with the costs of college, allowing them to avoid applying for a personal loan, especially during the first year. Naturally, while students who work tend to learn faster and to become more responsible with time, they can also miss out on some quite important college-related things, like finding career-related opportunities and such.
– 2. Always Budget (even when not paying): Regardless of their financial condition or whether they have a personal loan to repay or not, one of the first things that all college students should learn is to know how to keep a budget. This is an indirect way to learn about managing their expenses, and students who don’t learn how to budget and to control how much they spend in gas, food, clothes and more, rarely manage to do better with their savings later in life.
Sadly, Erika mentions that many of her friends have absolutely no idea of how to track their spending, even when it comes to simple things like shopping, dining out, movies and the like. She mentions that even though her parents footed the major bills of her education and without applying for a personal loan, she tried to do her best to help. it might not help much of financially speaking course, but Erika feels she now is far more mature and responsible.
There you go. We hope that with these two case studies you now have a better picture of how to face the expenses of college as s family and without ever needing to acquire a personal loan.