When students and families begin the process of exploring higher education options, life feels like it gets overwhelming pretty quickly.
With the job market and the economy changing rapidly, one of the first questions is whether going to college makes the most sense. Should students consider a trade such as becoming a plumber, electrician or auto mechanic? Or if I do go to college, will AI make my major obsolete by the time I graduate?
Consider the Important Questions
When students have settled on their career path, what they hope to earn will determine their “return” on investment. This should be a primary consideration, especially if they will be graduating with student loans.
Some important questions for students and families to consider when embarking on the college quest are:
- What can they expect for a starting salary, and long term salary growth?
- How do they plan to land their first job?
- Will their new school offer or require completed internships in order to graduate?
- How active or big of a role can they expect their school’s alumni network to play?
It’s important to remember that as with most things in life, there are obvious right and wrong. But most often, it’s about consequences. Families and students will benefit from weighing the pros and cons, costs and benefits, and most importantly, be willing to accept the consequences.
A significant consequence of student debt upon graduation are life goals such as purchasing a home and obtaining a mortgage. For those who may be considering entrepreneurship or investing in a new business venture, student debt may limit the available capital or borrowing power needed to invest.
Merit Aid
Academically high performing college applicants will have a high chance of receiving merit aid, but others may not. Merit aid is also defined differently depending on the specific college or university. Some schools will base merit aid solely on high school academic performance.
Others will also weigh extracurricular and demonstrated leadership activities, in addition to strong academic performance in their merit awards. However, this is only part of what students and families have to decide.
Tax Credits
Students and families have a number of tax credits and deductions available to them to help cover the cost of education. The American Opportunity Tax Credit and Lifetime Learning Credit will both help, but based on today’s cost of college, these won’t exactly cover a lot of most private and state public flagship institutions.
Students and families should explore every possible avenue for tax credits, deductions and scholarships. During their time in college, students can explore becoming resident assistants (RA’s) or enroll in a work study program. RA’s usually live on campus for free or at a significantly reduced cost. Work study programs will either pay students for their work or apply their earnings toward the cost of their education.
Legal Matters
Most students are 18 years or older by the time they start their collegiate journey and this means they’re also legal adults.
Most colleges and universities will provide the necessary forms for students and families to sign giving parents permission and/or certain authority to act on the student’s behalf. But these may not be enough to provide necessary legal authority to make medical decisions, manage their finances and even speak with their doctors. This is especially important should something happen when a student is not on campus or during spring or summer break.
Families should strongly consider adding consulting an attorney to their college planning process.
While there are many considerations and decisions to make when planning for college, there are many resources available. College fairs and scheduling campus visits can be stressful, but students who are determined to pursue higher education will benefit over the long-term by investing time to find their best fit, in the most long-term cost effective manner.
The foregoing content reflects the opinions of Axis Wealth Partners, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only. Axis Wealth Partners does not provide tax or legal advice.