Aventura, FL – As you make plans for your children’s post-secondary education, keep in mind that the average student’s debt is currently almost $30,000, and it’ll be even higher by the time your kids graduate! The truth is most young people—and often their parents—can’t afford that kind of debt, so it ends up damaging their credit rating and ability to buy a house and raise a family.
The best way to prevent such problems is to avoid massive student debt in the first place. Here are some suggestions:
- Think return on investment. Choose a program you like, but also focus on what the job prospects are and how much they pay. An expensive degree doesn’t make sense if you end up earning minimum wage.
- Avoid non-government student loans. Even government loans can lead to major debt problems. But when you get into private loans, the interest rates are usually much higher and there’s less repayment flexibility.
- Apply for every scholarship and grant you find. Even if your marks weren’t fabulous and your parents aren’t poor, you may still qualify for aid. Some scholarships are based on volunteerism, community of interest, non-academic skills, etc. Talk to a guidance counselor or financial aid office—and do lots of research.
- Find a school that’s looking for someone like you. Each school has its own selection criteria, based on student talents, interests, background, needs, etc. Finding the one school that really wants you can result in reduced fees, scholarships and other perks. But be sure to discuss all this with the school before you enroll—that puts you in a much stronger negotiating position!
- Smart mortgage strategies. You can also use your mortgage to help fund education. You can free up money for your yearly RESP contribution by taking advantage of many mortgage lenders’ “skip a payment” feature. Or when the time comes, you can do an equity take out to cover tuition fees so you end up paying affordable mortgage rates instead of expensive consumer loan rates.
Bottom line: make student loans your absolute last resort, even if that means working for a year before going to school, or taking a part-time job while you’re learning. If you’d like to discuss other strategies for avoiding student loan debt, we can introduce you to one of our local financial planning partners. Call us today!
Ideal Lending Solutions is your premier home mortgage lender in Florida. At Ideal Lending Solutions you will work one-on-one with a dedicated mortgage professional who can explain loan programs and offer great mortgage rates to meet your financial goals.