College Education Equals Big Student Loan

We, as parents, always want best for our children especially when it comes to education.  We believe we must give our children the opportunity to get the “best education” out there.  This is the reason why so many college students graduate with a very high education debt and no job.  If you ask the college students and their parents if it was worth accumulating student debt into $100,000’s, they will quickly reply back with a firm ”No”.  Still more and more students turn to student loan or even their parents life savings to fund their college education and I promise you it will not stop because our tradition is to send our kids to the best university despite high costs.

One of my co-workers has two sons who are both now in college.  These kids attend expensive private colleges where the tuition and board is in $40,000+ range per kid.  They both have a small scholarship but not nearly enough to cover their education cost.  I see first-hand how these two kids are draining their parents life savings.  Fortunately for these two college students, they will not graduate with a high student debt since they have an awesome parent who is willing to cover majority of their college expense.  I hope they realize someday what their parents went through to give them the best possible college education and experience.

 

So, is it worth sending your children to one of the best colleges while they accumulate high student debt or drain your life savings or even worse your retirement fund?  Personally, it is not worth it.  Can you imagine how long it will take for a college graduate to pay off $100,000 student loan?  It almost like a home mortgage payment where you will be paying it off next 20-30 years.

 
Even though I believe it is not worth accumulating high student loan to get a college degree, I still believe our children must get college education.  There are options by staying with in-state public colleges and universities, which would be around $20,000 total cost per year.  I heard about college prepayment programs that is provided by your state and it only covers the tuition cost.  Basically, you would be paying today’s college tuition rate for 4 years now, which is only applicable to in-state public colleges and universities.  The benefit here is that as the college cost increase every year, your tuition will be fixed until your children go to college.  There are also 529 plans where you can withdraw tax deferred.

Comments
  • saving money ideas October 22, 2011 at 8:38 am

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