January 18, 2011
A common concern parents have when meeting with me is “how am I going to pay for college?” Some other questions parents should contemplate are:
What will your child be studying?
Where will they go to college?
What are the future employment opportunities of your child’s choice of major?
Too many kids are graduating with over $100,000 in college loans (guaranteed by their parents) with a degree in a field where they can’t find a well paying job. Worse, many fields require a masters’ degree before livable wages will be paid, especially in the Northeast. A $100,000 loan can mean a monthly payment after graduation of $775 (over 20 years) to $1,100 (over 10 years). That kind of payment will not leave much left over for rent for a recent college graduate. Larger loan balances will result in even bigger monthly payments.
Parents must play a strong role in education planning with their children. A parent cannot expect their 18- or 19- year old child to understand the ramifications of taking on so much debt. Parents must provide this financial education, along with advice as to what major and college makes sense economically. We can, of course, assist with this.
It is easy to get caught up in the excitement of attending one’s first choice small private college. However, after a few years in the work force, very few employers look at a prospective employee’s choice of college as a major contributing factor in hiring, promotions, etc.