When your child started applying for colleges, chances are they didn’t think much about how their education would be funded.
According to CNN Money, the average student loan debt was $29,400 in 2013. Considering the high cost of college tuition, parents and their students need to be aware of their options for reducing student loan debt.
Many future college students often need assistance from their parents. Whether it’s receiving money for tuition or having a cosigner for a loan, parents play a huge role in helping their children through college. If you have a student who’s preparing for college, here are some things you can do to reduce your college student’s debt.
Create a savings as soon as possible
Clearly, the best way to decrease the burden of student loan debt is to prepare in advance. If possible, create a savings for your child’s education. Even if you’re only setting aside $100 per month, this amount will make a difference in your child’s education costs.
Select the right school
Although your student might have an idea of their “dream” school, it’s absolutely necessary to be realistic with their education. In most cases, college students can receive just as good of an education from a state institution rather than a private college.
Not only that, but many students can complete their general education requirements through a community college. As you begin to shop around for colleges, be sure to pick the best school with the greatest value for your student.
Create a budget for your student
The best way to manage student loan debt your child is to create a realistic budget. Not only will your student need to pay for tuition, but they will also need money for housing, food, textbooks, and leisure.
Discuss with your child whether they’ll need to get a part-time job or if you’re able to help them with the most of their expenses. By creating a budget, you’ll keep your student from spending their student loan money on spring break excursions or unnecessary trips to the mall.
Communicate with your student
Communication is key when funding your child’s education. Make sure they’re always in the loop when it comes to managing their student loans and the budget you’ve created for them while they’re in college. This will help you hold your student accountable for their education and prevent them from making unnecessary decisions that could cause them more debt.
Discuss payment plans with your child
Once your child graduates from college, he or she will be faced with the reality of their student loan debt. It’s up to you to have a discussion with your college graduate on their plan for repayment and how long they will take to pay back their loans.
It’s also important to think about a plan in case your child doesn’t land a job immediately after college. Your student will have six months after graduation to find a job and determine their payments. Make sure they have a plan in place so that don’t go into default on their loans.
Although college is a huge expense for most college students and their families, it’s still a valuable investment. By following these tips and planning for the future, you’ll be able to reduce your child’s student loan debt and make college more affordable.
What are some ways you’ve reduced student loan debt for your student?
