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College Loans – Ready, Set —–Think Twice. If you can, just say “No”
Ready to sign the paperwork for that college loan! Think twice before you do.Let’s imagine the college planning process. It has been a long, drawn-out process and the finish line is in sight – college acceptance. Parents and students are mentally exhausted. By the end of the college planning and application process there is not much patience left, and there is the feeling that it’s finally over. Everyone is ready to move on to that next stage of their lives.
In addition, just before school starts the summer season is upon us and it’s time to make those summer vacation plans. Enjoying the park, beach, mountains, or wherever becomes a priority. After all, we want to spend time with our college-bound children before they move on to the next stage in their lives and away from us. It’s ironic that most American families spend more time pondering the cost of summer vacation – travel, accommodations and sightseeing – than they do thinking about paying for college. When you’re back from that summer fun in the sun and that first bill rolls in for the first semester of college, plus room and board, who is going to pay the bill? You could end up spending tens of thousands of dollars more than you have to.
What if you don’t have savings, cash, or other resources? There is usually a financial gap between what the college will pay you in terms of federal scholarships and work study programs and what the student has to pay. When it comes to paying for college these days the first thought is usually to get a loan, the old buy now/pay later syndrome. Have you been thinking about applying for one of those college loans you’ve seen on TV and on the internet? Ads are everywhere. Why? College lending is a lucrative business – the lender stands to make big bucks from your immediate cash emergency.
Before you know it, the kids are going off to college, taking that first job, or moving out. Isn’t it wonderful to observe their new sense of independence? After all, that’s why you’ve spent so many diligent years teaching them a sense of responsibility.
Are you aware that teens entering college today have been labeled the Boomerang Generation? That’s right – you throw them out into the world and they come whirling back, into the comfortable arms of home. College grads defend this behavior (and so do their parents) because some contributing factors make their move into the real world less appealing. Rising home prices or apartment rent could be the culprit. So could the inability to either get a job or live on the going rate for an entry level job. Then there is the student loan that needs to be paid back within months of graduation. All these factors can be so scary that students are rushing back home in big numbers to the comfort of mom and dad and those home cooked (free) meals.
You can stop the battle of the boomerang before it begins. It’s important to teach your young adult the basics of living independently. Typically there are no high school programs about developing Life Survival Skills, so parent, it’s up to you. Get down to the basics early on.
Think back at how you have been raising your children. Do they know how to do their own laundry? Prepare a meal or a snack on their own? Resolve their own problems with friends and at school? Do they share home chores with you?
Most of all, do they save and spend their money wisely? As a person who has counseled hundreds of teens and their families about getting ready for college, I can tell you that most students who cross my path, while they may be academically successful, aren’t savvy in financial matters.