5 Ways to Get Your Kid Through College DEBT FREE Amidst the Student Loan Crisis

Don’t let your kids go off to college knowing they’ll have student loan stresses weighing them down when they graduate. Let them go to college and walk out with a life of freedom.

So over the past few months I’ve been reading some startling statistics regarding the student loan debt crisis and I just have to share them with you. First off, did you know that student loan debt has just surpassed the $1.5 trillion mark? Yes, I said TRILLION! In that same article in USA Today, it stated that 1 in 8 marriages that end in divorce attribute student loan debt as the primary reason for the divorce. Is anyone else freaking out when they read that statistic? Then, I read an article from ABC news that approximately 54% of first generation college students didn’t even finish college. In other words, these kids borrowed money to get a degree, didn’t finish college to earn the degree, and now have to pay off these loans without the degree-paying paycheck!

That is like paying payments on a car that you never received!

Student loan debt is such a serious problem that needs to be addressed, and fast because it’s affecting so many families and individuals of all ages.

Are you affected by student loans?

I, as well as many of you, was one of the millions of individuals that graduated with student loan debt ($100,000 to be exact) and let me tell you, I was beyond stressed. My husband and I were recently married when my first payment came in and we struggled to pay all of the student loan monthly payments along with all of our other expenses. We made over $80,000 and yet the student loans put a wrench in our plans to buy a house and plan for the future. It was CRIPPLING us! Thankfully, we have overcome that hurdle, but I wish someone (i.e. a parent or a high school counselor) would have explained the student loan concept to me better so that I understood the full impact I would be feeling from the decisions I made in college.

DON’T LET YOUR KIDS FALL INTO THE STUDENT LOAN TRAP!

As a parent, you need to understand what you and your child’s options are early on so YOU can develop a plan on how to get your kids through college with as little debt as possible, maybe even debt free (yes debt free is achievable)! It can be done and the earlier you start developing and working a plan, the easier it will be. So here’s 5 ways to get your kid through college debt free.

1. Start Investing NOW

If you have an emergency fund and are debt free, open a 529 account and start investing in your kid’s college NOW! For those unfamiliar with what a 529 plan is, it's an investment account specifically for education costs but it has a tax advantage where the “earnings grow federal income tax deferred and qualified withdrawals are federal income tax free.” (Fidelity.com)

In other words, you can invest after- tax dollars into the account, let your money grow over time, and then you can withdraw money tax free to cover things like tuition, room and board, or other college related expenses. But what happens if my child receives a college scholarship you may ask? As long as the scholarship/grant is tax free, then you are able to withdraw this amount from the 529 account without penalty. So a 529 account can be a great option for college savings.

Another option you have besides the 529 account is putting money into a good growth stock mutual fund. This can be used to save for your kid’s college but you’re not restricted to use it just on education costs unlike 529 accounts. Let’s say your child decides to join the military instead of going to college, instead of all your money being in a 529 account where you may have to change the beneficiary to your next college bound child, you can use the savings in the mutual fund account towards your child’s wedding, first house purchase, or whatever you want to gift them!

All in all, investing early is the best thing to do while your children are young because the money can grow as they grow.

However, this is not the ONLY solution for getting your kids through college debt free. If you’re starting this journey and your kids are close to entering college the next steps apply more to you.

If you aren't sure where to find the money in your budget, refresh your memory on how to budget and then check out these ways to save!

2. Apply for Scholarships

There are soooooo many scholarships out there that it will basically be a part time job for your teenager to apply, but it can be so worth it! Talk to your child’s guidance counselor (also known as a high school counselor) about local scholarships that your child can qualify for. Look into sites like myscholly.com where you can quickly search for scholarships that match your child. Also, if your child has identified a desired school to attend, then talk to the financial aid department and ask if there are any scholarships available. One last thing you can look in to is you or your spouse’s employer benefits to see if they help with tuition assistance. Any scholarship your child can win really will help lessen the student loan burden later on. So make sure they put in the hard work now so they aren’t paying for it later!

3. Conquer the SAT/ACT

Doing well on the SAT or ACT can open doors for more scholarships as there can be a minimum score requirement on applications. So have your child well

prepared to take either of these tests by getting them study books or even a tutor so they can feel more confident as they take these tests. I was 20 points away from earning a scholarship at my alma mater which equated to several tens of thousands of dollars per year I could have shaved off my loans. Make sure you invest the time to score big with those tests so you can optimize your child’s chances of earning more scholarships!

4. Attend Community College for Core Classes

All students going into college are going to have to take some amount of core classes before starting courses specific to their major. So if money is tight and you do not have the money to send your child to a 4 year college, they can opt to attend a community college to earn core class credits which can save you/your child thousands of dollars. Once he/she takes those core classes, they can transfer to a 4 year college and still get the college experience. Your child may put up a fight on this as it’s not the most appealing option, but be the parent they need you to be. They are still young adults who need mentoring and if you can avoid student loans using this option, then promote it and your kids will thank you later!

5. Work through College

Is your child in college already? It's not too late to try and save money and minimize their student loan intake. If they’ve exhausted all other avenues, the one thing they can do regardless of their situation is WORK. Yes, I know this is not ideal and you want them to enjoy their college experience but listen to me when I tell you that the burden of student loans can be extremely daunting.

TAKE HOME MESSAGE:

As a parent, you’ve taken care of your children their whole life. Don’t let them go off to college knowing they’ll have student loan stresses weighing them down when they graduate.

Let them go to college and walk out with a life of freedom.

Need more information regarding this topic? Schedule a free Discovery Call with me so we can chat and get your questions answered!