Looking back, planning for college was one of the most exciting parts of our senior years in high school. Thinking about what university would be best for us pretty much centered around the type of experience we wanted to have while we were there. For co-author Leah, a smaller school was a top priority so she focused on Spelman College in Atlanta, GA and Hampton University in Hampton, Virginia. Both of those schools seemed like great options, but there was just one catch: they were both private and came with a pretty large price tag. As excited as Leah was, she knew that figuring out how to pay for college would have just as much of an impact on her choice as whether or not she liked the campus or professors.
It was time to consider a financial plan.
Every student is faced with the question of how to cover the cost of college, but the answer differs for all of us. Statistics say that 1 out of 3 college students take out some student loan debt so we know that at least part of many students' options is to rely on federal funding. While that can certainly be apart of the investment in college, we are strong believers that students should try to leave college with as little debt as possible. For that reason, we encourage every student to begin the process of creating a financial plan to put themselves in the best possible position to not just get the degree, but to live well after. Below, we have provided a few questions for you to consider as you start your financial planning process. Of course these are not every question you could ask yourself, but we hope this can help you to begin to take authority over your financial future.
1. Talk with your parents. The first step you should make towards your financial planning process is to have an honest conversation with your parents or guardian regarding the plan to pay for college. You should have this conversation as soon as you consider college as an option. The main question here is: “Do we have a saving plan designed to pay for my college education?’" Their answer will determine the plan of action you take towards funding your college career.
2. Based on that conversation, what makes the most sense? Now that you have spoken with your parents, what makes the most sense for you, financially? Could an in-state school be a good option? What about community college? If you are considering a private school, do they have merit scholarships that you apply for if you do not have the cash to cover the full expenses? Be realistic in this conversation with your parents and self.
3. Have to take out loans? What is your limit on how much you want to pay back after graduation? If you have to take out loans for college, what is your limit on how much you want to pay back after graduation? We strongly recommend creating a budget and listing out all your expected expenses including:
Tuition, room & board, textbooks, transportation and personal items like a laptop. You can find most of these expenses on the university's website. Knowing how much debt is too much debt is a great way to narrow down your list of schools to those that are within the loan limits of your financial plan.
4. Check with StudentLoans.gov. Check out studentloans.gov to calculate how much your monthly loan repayments may be after you graduate. You want to know this early because, and this is important to remember, loan money is not free money. We will repeat, loan money is not free money so you want to know how much you will have to pay back after you finish with college.
5. We can't stress this enough, DO YOUR RESEARCH. Part of your financial plan should involve staying up to date with trends that are affecting your specific industry.
You want to make sure that you are aware of:
-The projected growth of job opportunities in your industry.
-What cities and regions have the highest growth of employment in your industry.
-The average salary for recent graduates in your industry.
-Will you need to pursue an advanced degree (medical school, law school, etc.) or obtain certifications that will help you to compete in that market?
This may impact the amount of money you're willing to spend on an undergraduate degree.
These are just a few of the questions you should consider and, as always, we highly suggest talking with you guidance counselor. Go into college with a financial plan, and you'll leave with less debt and more money to create the future you want.