When applying to colleges, many students rank their college list in order of 1st choice to last choice. While it is quite an accomplishment to be accepted and attend your 1st choice college, it is important to think through that decision in terms of how much loan debt you will be required to take on, to make that happen. As you will learn, significant student loan debt can have long lasting implications.
To date, 44.2 Americans have incurred student loan debt and collectively owe $1.4 trillion. These are frightening statistics. What students need to be asking themselves is “At what cost will I attend my 1st choice?” and “What makes this college my 1st choice?”
It is also important to think about life after graduation, "What are my long term goals?"
According to an article recently published in the Journal of Accountancy, college graduates are having to make some pretty significant sacrifices in order to be able to pay back their student loans:
- 81% of U.S. adults with student loans are currently making some type of financial or personal sacrifice
- 50% have had to delay contributions to their retirement accounts
- 46% have had to take on a 2nd job
- 40% have had to delay buying a house
- 37% were forced to move in with a family member
These statistics drive the point home that failure to understand the impact of taking on significant loan debt to finance college, can have major consequences for years to come.
How to be sure that families are considering every aspect?
- Be sure every college on your list is one that you can see yourself being happy at for 4 years. Know your abilities, interests, and social and academic preferences. Do your research and visit college campuses until you find a handful of colleges that you can see yourself thriving at. When it comes time to make the decision, be sure that you are considering every aspect and weighing all of your options carefully. Investing time and effort into choosing the college that you will attend, may save you a lot of money down the road.
- Discuss your current financial situation as well as your long term financial goals with a professional who can help you see the bigger picture. When going through the college planning process, families can easily make decisions based on emotion, rather than what is in their best interest. An objective 3rd party can help you paint a long term financial picture, so you are making a decision that is both realistic and makes everyone happy!
After thinking through your decision from every aspect, you may come to the conclusion that the benefits of attending a particular college far outweigh the amount of debt that you will incur, but what’s important is that you took the time to think it through.
The more time and effort that you invest during the college planning process, the more prepared you will be to make an informed decision.
If you would like to find out how we can help guide you through what can sometimes feel like an overwhelming and stressful process, please contact us: