Students and their parents talk a lot about going to college but they’re not necessarily talking about how to pay for it. Financial experts say it’s important to talk early and often about budgeting for college.
It’s especially significant to have a plan because the cost of college continues to rise.
According to College Board, the 2018-2019 average price of published tuition and fees was biggest in the private nonprofit sector, with a 3.3 percent increase totaling $35,830 a year.
“The biggest challenge that families encounter is they don’t spend enough time talking about their college budget and what affordable choices there are based on that,” says Brian Cox, manager of the college planning network for Thrivent Student Resources, an affinity brand of Thrivent, a not-for-profit financial services organization.
Thrivent Student Resources’ goal is to empower students and families to make smart financial decisions about paying for college and repaying student debt. Parents can’t afford to take on new debts later in life. According to the Wall Street Journal, adults over age 60 owe a combined $86 billion in student loan debt.
Cox says typically families have saved maybe enough for one year of college. In fact, one study says 48 percent of families either don’t save for college or start saving less than one year in advance of their student entering college. Cox explains that, unfortunately, students and families rely solely on a school’s financial aid package, but they should be talking about their budget for college, how much they want to spend, and how they’ll pay for it. Then they can narrow down their options based on what they can afford.
“Research shows only 2 out of 5 families create a plan to pay for college,” he says. “But the ones that do create the plan, they save three-and-a-half times more for college and the students borrow a third less.”
Cox advises starting the college affordability conversation as soon as the student starts high school.
“Families are telling us they feel overwhelmed,” says Cox. “There are too many options and they don’t know where to go, who to trust, and how to put it all together. We’re building an online journey for them to do that. We also offer personalized, one on one college planning services for families.”
Students register on Thrivent Student Resources’ website and get full access to financial college planning tools and resources including a scholarship search, college savings estimator, and college search and cost comparison, among others.
Cox says it’s crucial to know “what’s free and what’s not free” and encourages all parties to know what types of funding sources are available, such as loans, grants, and scholarships, including merit aid and need-based aid.
Crowdsourcing — getting family and friends to donate to your cause — is one of the newest ways Thrivent Student Resources is helping students figure out ways to pay for tuition, books, and room-and-board. Their online crowdsourcing tool, GradPath, which doesn’t charge fees, simplifies the donation process.
No matter where you are in the college planning or paying process, students and families are encouraged to join the community at www.thriventstudentresources.com to explore options, become better educated, and complete your college journey with less debt.
Kristen Castillo, [email protected]