infographic

Generational Student Debt in America #Infographic

Generational Student Debt in America #Infographic | www.TheHeavyPurse.com

Student debt has topped 1 trillion dollars and many parents today worry about how they (and/or their kids) will pay for their college education. It’s an opportunity and advantage we want to give our kids, but the rising costs make it feel out of reach for many. Like most things we want, we need to create a plan and it starts by educating ourselves, so we can make smart decisions around college.

Is College the Right Choice for Your Child?

With the increasing costs, we need to be extra mindful to help stretch our college savings. We need to consider all options, including whether college is the best fit for your child. Many parents automatically plan to send their children to a four-year university, but it is not always what they want or need.

This can be very hard for parents, but we need to remember that our chief priority is to do what’s best for them, and college isn’t always the right fit. In some instances, a trade school may be a more appropriate choice for them. What matters is that your kids know you support them, so be sure to regularly communicate with them on what their desires are for their career.

College Funding Options

Beyond student loans or utilizing college saving vehicles, such as 529 Plans or UGMA/UTMAs, there are a few other college funding options to consider and can help minimize the amount of money you need to save or borrow.

Apply for Grants

A grant, unlike a loan, does not need to be paid back. The Federal Pell Grant is given to students pursuing a bachelor’s degree with the amount awarded based upon your financial need and the cost of your school. The maximum amount for the 2015-2016 school year is $5,775. You can apply by filling out the Federal Application For Student Aid (FAFSA) and don’t forget to ask about other grants available with your college’s admittance office.

Apply for Scholarships

This is one of the most missed opportunities in my opinion. When I speak with parents who are writing checks for their child’s college education and concerned about the costs, many admit their children never applied for any scholarships. You may be surprised by how many local businesses and civic organizations offer scholarships that your child may be qualify for and face less competition over too. Also check out FastWeb, Petersons and College Board to search for scholarships. They should look for and apply for scholarships every year, not just their freshman year.

Consider Military Service

If you have a desire to serve your country, the federal government helps veterans pay for college through the Montgomery GI Bill. The benefits vary and are based on your length of service and what type of education you plan to pursue. Learn more at the US Department of Veteran Affairs.

A Look at Student Debt in America by Generation

I found this fascinating infographic from Consolidated Credit on how tuition costs have evolved throughout the years.

Generational Student Debt in America #Infographic | www.TheHeavyPurse.com

It paints a pretty scary and ugly picture for the rising costs of tuition. Respectfully, I do believe there will be a tipping point eventually. Right now, most still believe the long-term benefits outweigh the cost, but at $400k+ for four years of higher education, those advantages may no longer hold true. Colleges need students and employers need educated employees, so at some point, there will need to be a course correction.

How are you saving for college? Do you think tuition will get that high? If it does, do you think a degree will be worth it?

Shannon

May 22, 2015  •  11 Comments  •  infographic

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Comments

  1. Friday, May 22nd, 2015
    2M people over the age of 60 are still paying off student loan debt? That's a crazy stat.
  2. Friday, May 22nd, 2015
    Well, if this doesn't have Financegirl written all over it, I don't know what does! ;) Love this, Shannon. I particularly like the part of the infographic that shows how much faster you payoff your debt just by paying an extra $50 / month. It's amazing!
  3. Friday, May 22nd, 2015
    What's crazy is that after all is said and done, they are only getting jobs at starbucks, target, etc. Talk about kicking you while you're down. I wonder how long they are at those jobs though before they get something better? I was a waitress for a little bit right after I graduated from college before I started my "real" job.
  4. Friday, May 22nd, 2015
    Being a father to a 2 year old, that total number for 4 years of college seems scary. Even though I'm currently contributing to a 529 plan, seems I need to up that a little. But I still have my own debt to pay off. But I agree there is most likely going to be a tipping point. $400K is insane for 4 years of college, so at some point enough people will not be able to repay their loans and less people will be applying to colleges, so hopefully costs will go down.

    Great post and infographic this one is a keeper.
  5. Friday, May 22nd, 2015
    I already knew many of those numbers, but it's crazy seeing them in infographic form visually. There are so many things that could be said about the increase in tuition and student loan debt load over such a relatively short time span - but more than anything it just shows the need to make an informed and educated decision involving both the parents and the kids.
  6. Friday, May 22nd, 2015
    The numbers are really insane, and I just don't think these tuition costs are sustainable. Both my wife and I went to in-state public schools and those costs are still somewhat reasonable. I know it's tough to tell your child that they can't go to a particular school because you can't afford it, but it's not worth it for a parent or the child...or both to be indebted with student loans for decades to pursue higher education. And you're right, it is also tough to acknowledge that sometimes a child is not meant to go to college...there are other alternatives like vocational schools. I don't understand why people frown upon vocational schools.
  7. Friday, May 22nd, 2015
    Wow! Those are some crazy stats and visuals. Like you, I agree that things will have to change in the near future or college simply won't be worth it anymore. For some degrees and programs, it already isn't!
  8. Saturday, May 23rd, 2015
    I'm actually writing a post on whether college is worth it or not. I think it is, even if you don't intend on working in an office. There are a lot of intangible benefits of going to school:

    1. It makes you more open to the diversity of the world and student populace. You are exposed to all sorts of interesting ideas and interesting people.
    2. It makes you practice your personality judgement skills.
    3. It's a memory that you'll cherish forever. College years are some of the best years of your life!
  9. Saturday, May 23rd, 2015
    I'd like to start off with by saying that you have a great infographic, Shannon. I think parents should be prepared for this. And, I am talking that it should be long term like preparing it for more than a decade so that they can give what kids want to take in college and support all the way. Give the best education kids will ever have.
  10. Monday, May 25th, 2015
    This is both a great and a sad infographic. It's crazy how much college prices have changed in a few decades. Now the college dream is so much more complicated than it used to be and families really need to plan properly so that parents are prepared for retirement and kids aren't strapped with a lifetime of debt at the end of it.
  11. Monday, June 8th, 2015
    It is a little scary, both the number of graduates and the increase in costs. I think some of the problem is that a degree has been devalued, and some majors just aren't equipped for our current economy. A college degree is still worthwhile, but students really need to think about their chosen field and the available jobs. Skilled positions do exist, and many pay well, but they aren't hiring art majors...
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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