No one wants to carry five figures of education debt into middle age or retirement, but some do. The burden is not just financial. Last fall, the Madison Capital Times asked student loan borrowers in the state of Wisconsin how they felt about their education debt. Sixteen percent said they were “terrified” of it, and another 30% indicated they felt only slightly less so. Fortunately, you may have possibilities to manage and reduce the debt load and the anxiety it breeds.
How much will your family end up paying for college? Your household’s income may have less influence than you think – and some private colleges may be cheaper than you assume.
Private schools sometimes extend the best aid offers. Yes – it is true that the more money you earn and the more assets you have in a tax-advantaged college savings plan, the harder it becomes to qualify for financial aid. Merit aid is another matter, however; most private colleges and universities that boast major endowment funds that support healthy merit-based aid packages.
Most people think of a ROTH IRA as a method for saving for retirement, but it can also be used to cover college tuition. When people explore their options for saving for the children’s education, often times a 529 is a popular way to go. However, there are a lot of advantages to using a ROTH IRA to save for college, which should be considered as you make the decision on how you plan to save.
Do you have a federal student loan that needs to be repaid? You may be surprised at what the government might do to collect that money someday, if it is not paid back soon enough.