Paying for college is the top financial worry for parents. It beats out funding frets for medical expenses, retirement, and maintaining a standard of living, according to Gallup’s 2001-2015 Economy and Personal Finance survey released Monday. It showed paying for children’s college displaced retirement which held the first place financial concern over the previous 15 years. Families need to put this major expense into perspective. They can form a game plan by understanding the details of the cost of college attendance and their financing options because colleges don’t accept toy money or real stress to pay their bill.
Specifically, 73% of parents of children younger than 18 had more anxiety over paying for college than any other financial issue. That is a whopping seven in 10 parents out of the more than 16,000 Americans Gallup polled. “And the 73% worried about it is notable because not all parents likely expect their child to attend college, although many more parents may hope or expect their child to go to college than actually will,” Gallup analyzed.
Increasing tuition, fees and other costs can lead to a future financial burden for parents and their college-bound kids. But higher education is an investment in students’ prospects because college graduates earn so much more over their lifetime than their peers who don’t earn a degree. The key is to balance costs against funding so family members aren’t burdened by unaffordable student loan debt that must be paid back. Knowing what constitutes cost of attendance (COA) and what the college finance options are can help parents and students plan ahead and alleviate some anxiety.
The COA formula used by colleges and the government includes tuition and fees, room and board, books and supplies, transportation and personal expenses. That seems comprehensive but there are hidden costs that financial aid does not address. There are many costly items incurred by parents of college-bound students (POCS) that are not counted. The POCS COA does include parent travel costs of meals, lodging, gas or plane tickets for special campus events or other visits. It also includes borrowing costs for parents and students like interest and fees. Added program expenses and certain other initial personal expenses are also considered. Parents can use the handy POCS COA Chart to help calculate a better college cost estimate to decrease nasty financial surprises that increase worry.
Families can also form a team to learn about financing options including creating a savings plan and applying for outside scholarships and government/college free money grants, loans that must be paid back, loans with forgiveness programs that cancel all or part of the amount borrowed, loan repayment options, and work/study programs. Have the college cost talk now. The more families know about their college costs and their funding options, the more they can focus on planning instead of worrying. Get more information about what to expect during the college process by subscribing via the subscribe button to receive more college prep articles and visiting pocsmom.com. Please share your views in the comments section about a game plan since college funding is parents’ top financial worry.