Occupy Wall Street is being dismantled and quashed now, but It won’t be long until Pomp and Circumstance and mortarboards are in the air along with the excitement of college ahead for high school graduates. But then reality smacks; 65% of students that graduate from a private college have outstanding student loans when they finish college (source: Council of Economic Advisers).
And for public, “in state” universities, it is going to cost about $150,000 per kid for a college education. This sum for a private college or University almost doubles! With the rapidly disbanding Occupy Wall Street movement, taking out student loans without being able to find jobs to pay them back is ludicrous. Is it a tuition scam being pulled on our youth and their cash strapped parents? The scam is that the cost of college and tuition has way exceeded the rate of inflation by as much as 10% per year in some areas. Providing a college degree for our children is becoming more of a dream than a reality for many families and taking out loans in this economy is like Russian roulette.
“Choosing a college is not about a cost differential of a designer purse or pair of sneakers over a generic product, it’s about a life charting detour if taken too lightly.”
But parents and students continue biting off way more debt than they will ever be able to chew or hope to digest. A college degree is of utmost importance, especially today but at what cost? We have become really good consumers when it comes to almost everything else… but not so much when we think the purchase is a necessity for our children.
Students today are graduating with literally hundreds of thousands of dollars in debt with a degree that is may not be very marketable in a vile economy and a horrendous job market.
Parents bought into the dream that a college degree was paramount but often failed to factor in the marketing genius most universities have deployed the past 25 years. Colleges now invest millions into stadiums, student recreational facilities and gyms that entice enrollment but drive up college cost.
It is typical today for a university student to graduate with the equivalent amount of debt that could have easily purchased their first home! As Occupy Wall Street has shown, college graduates cannot pay the student loan debt and the net results are horrible credit ratings, foreclosures and even bankruptcies of the student and often their parents. It is a perfect storm, or better stated, a financial disaster.
Creditor Collection calls and threatening letters make life miserable and can literally ruin and destroy ones future. Suicides have been attributed to debt overload. And for those of you who’ve not had to face this debacle with your children, kudos. Do not take the route of loans over prudent affordable college choice first.
Applying for grants and free application for federal student assistance (also called FAFSA) is the ideal first step. Secrets on tax free 529 plans and tips for filing for aid using strategies with fixed annuities, indexed annuities and even variable annuities are available. Be smart when applying for aid, grants and low cost loans but also apply Tough love as well. Being tough today is better than dealing with a foreclosure or bankruptcy (or worse), in the future. Get started by getting your free Holiday Budget ePlanner from www.mymoneytrack.com and set up your plan today. And to learn more about the Dark Side of Student Debt, click here for the report from Kiplinger.
When you need the best local financial advice or budget help available, contact My Money Track to help you get your life back on track. Your IRA or rollover is just too important of an investment to ignore. Local professional advisors are willing and able to help.