“T
By Jason Arsenault rillion-dollar blackhole that is hurting the financial system” is how experts are referring to the student loan problem. Student loan debt is now bigger than our nation’s credit card debt by billions. If your student decides to attend the University of New Mexico, the costs exceed $22,000 per year, and only about a third of the next incoming freshman class will graduate within four years. Half of that incoming freshman class will take six years to get their bachelor’s degree. Four years of paying $22,000 per year is a total of $88,000, add another 2 years and now the degree cost is $132,000. Let’s not even talk about the costs if your child wants to attend a private college or go out-of-state. The reasons to go onto college are numerous. However, many students want to earn a degree in a profession that will give them a financially secure future. College
graduates earn on average almost $20,000 a year more than a non-graduate. That is pretty sweet and will help pay off those student loans. You have to feel for those that didn’t get a degree. NPR reported only 58% of students who started college in 2012 had earned a degree by 2018. Those guys have big student debt hanging over their head and have some college classes, but without a degree are still going to be left on the outside. Why am I thinking about this? Next year I will have a high school senior and she very much wants to go onto college. She even talks about schools far from her mother and father, but I am sure that has more to do with the mother. That means we have to get the ACT or SAT test out of the way, hopefully with an acceptable score. Her senior year we will need to complete the Free Application for Federal Student Aid (FAFSA), narrow her choices to which colleges she will apply to, then figure out how we are going to pay for it all. Let’s just say we have a lot to get done in
a relatively short time. The FAFSA is a very important piece of the equation. Every year the federal government provides more than $150 billion in financial aid for school. What is important about this application is it will provide us with free monies if we qualify. One of the biggest mistakes is not filling out the FAFSA. Many schools don’t consider you for scholarships based on academic achievement or other talents if you don’t fill one out. Don’t worry if you don’t believe you will qualify for aid. My sister had her first child head off to college a few years ago and talked about what a big deal it was to fill this form out. After she had completed the FAFSA, she was informed that she wouldn’t receive any financial aid, meaning the total cost of college was her and her husband’s responsibility. That was because of the assets she had to list when filling out the application. If she would have done a little planning a couple of years
College Planning 48
October 2019
