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As certified college planning specialists, we help students and families of Western New York better understand the college financial planning process. Every school year, we help future college students with FAFSA, TAP, and the CSS Profile, and despite the ongoing alterations to the forms, it helps to have someone who knows what they are doing. The earlier you begin your college money talk, the better, but today on the blog we hope to help families realize that college isn’t free, and just how much money you’re going to need to pay for it.
Here are 4 Things That Will Definitely Impact Your Final College Bill.
How Much Time Do You Have?
This is the first question when calculating how much college will cost. You may wonder why. Well, it’s pretty simple, time is money, and the more time you have the more money you can save before getting your first student loan bill. Obviously, teenagers aren’t thinking about college money, but parents and grandparents can. However many years you have left can offer you a bit of comfort in knowing you have some time to plan.
How Much Do You Have Saved So Far?
Not everyone plans to save for the kids’ college fund. That’s ok. But knowing how much you have saved is another big step in understanding how you’re going to pay. Not everyone has a big savings account. Not everyone has stocks and investments, but if you do, your average rate of return could also be factored in. Any outside funding through the form of grants or scholarships can also be added in.
Gross Annual Income
This comes into play, especially when reviewing the FAFSA and financial aid process, but can also be taken into account when planning to pay. Having an idea of what percentage of your annual income would or could be allotted toward your son or daughter’s college is a big eye opener for parents.
Average Cost + Inflation
The cost of a college education isn’t getting any cheaper. Depending on what type of college your child is considering can impact the cost greatly. To quickly demonstrate, a Public In-state student living on campus might cost somewhere around $26,590, whereas if that student were to live on campus in an out-of-state college, it could cost $42,970. Private college on campus? Could be upwards of $53,980. When you consider these factors, along with the current state of inflation, things can get pretty intimidating. College is a wonderful place to learn and grow as an individual, but there is great responsibility in planning the experience properly. Knowing this info can greatly impact the first steps of your kid’s life after college, and can be a huge mistake if not thought out ahead of time. We see so many examples of families who waited too long to start planning or even the unfortunate examples of kids wishing their parents told them more before taking out loans. If you have a kid, don’t wait til the last minute to plan their college experience, the earlier the better! If you have any questions about financially planning for college don’t hesitate to reach out by phone or contact form to speak with Jeff Boron today!