That Four-Letter Word…..DEBT by Brian Kruse
That Penn State tuition bill has arrived. When my son was born in 1998, one of the first things I did was open a 529-college savings account for him. I was so sure I was on track to be able to pay all of his college costs. Well, a dot-com bubble and a great recession later, that plan didn’t quite work out as I had hoped. I now find myself in the same boat as many families and having to navigate the world of student loans. Every family’s financial situation is as unique as the families themselves and each one has to find the right solution that fits their particular needs, but there is one piece of good advice that applies to us all: educate yourself first!
The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation conducts a National Financial Capability Study, and just recently released the 2018 report.
One of the sections focuses on student loans and it provides a few interesting statistics;
- 47% of those surveyed with student loans for their own education say they wish they had gone to a less expensive college
- 51% say they did NOT try to estimate their monthly payments when obtaining their most recent student loan
- 48% are concerned that they will not be able to pay off their loans
These findings suggest that many student loan holders did not fully understand what they were getting into when they took out their loans. Don’t let that be you or your student! There are a multitude of resources out there to help educate us about student loans. One of the most helpful resources I found when doing my research is the Student Loans presentation from the Penn State Sokolov-Miller Family Financial and Life Skills Center “MoneyCounts: A Financial Literacy Series”.
The presentation covers topics such as:
- The differences between federal and private loans
- Eligibility
- Borrowing guidelines
- Repayment examples
Remember, knowledge is power. That’s why we send our students to college in the first place!
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Brian - great article thanks for sharing your personal experience and providing some really helpful resources. I'm not sure how many students and families are aware of the Penn State Sokolov-Miller Family Financial and...see more
Great article we as parents have to do the best job we can to provide an education for our children.
Thanks for the article! The costs of college cm be daunting and especially when unknown or unclear fees appear. Knowledge and awareness greatly reduces stress and supports better planning!