How Does A Family Pay For It?

So, what are you supposed to do? How are the families supposed to pay for all of that?

A lot of people initially think well, okay, they've got to pay out of savings. The other option is, of course, borrowing. The third option is scholarships. And the fourth option is go to a cheaper school, or not send your child at all.

Let's take a look at each one of those options.

First of all, savings. Very few people that I've ever encountered ever have enough savings to pay for four years of a college education for not only one, but in several cases, two children.

And even if they do have money set aside in savings or investments, they don't want to deplete their entire life savings to pay for a college education, which I agree with.

There are other goals in life that you have to worry about, such as retirement planning, and certain other things like buying homes, weddings, bar mitzvahs, sweet sixteen’s. I mean there are a million different issues that will take place and that you have to have money for.

So, I don't suggest that any of you deplete your entire life savings.

Borrowing is a second option. A lot of people think that this is another option, like taking out home equity loans or commercial loans. That's okay and it may be the only option you have in certain cases, however, most of us are already in enough debt and don't need any more debt piled on top of what we currently have, so I would say borrowing is probably something most of us will have to do to pay a portion of our children's college education. But you shouldn't have to borrow the whole entire cost. And there are ways to get around doing that.

Another huge misconception is scholarships. A lot of people, because their children are athletes or they're extremely intelligent, or they have an artistic talent, automatically assume that they're going to get a private scholarship, or that a school is going to be so overly excited about having their child go there that they're just going to wine and dine them and give them this huge scholarship to cover everything.

Unfortunately, reality sets in and you will realize that this does not occur, for the most part. And even when it does occur, it very rarely will cover the entire cost of attendance.

So, relying on scholarships, especially private ones because of certain ethnic background or religious affiliation, or talent, is a very, very bad move.

Going to a lesser school. Do I believe in sending a child to a lesser school? What Itry and help my clients discover is that, believe it or not, in many cases, it can be cheaper to send your child to a private university that costs over $29,000 a year than it does to go to a state school that only costs over $12,000 a year.

And I'm sure a lot of you are saying to yourself that that doesn't make any sense. But believe me, in future posts, I'm going to show you exactly how families could end up paying less out-of-pocket to go to an expensive private school than to go to a state school.

Your last option is to not send your child at all. To me, this is the worst of all the options. Because where there's a will, there's a way. And believe me, there's plenty of ways to come up with funding for a college education.

If you take a look at any statistics, the chances of your child being successful, and capturing jobs and in earning a higher salary, in the long run, are so much higher with a college diploma than without it. Believe me, I'm a big advocate of real life learning and that the best learning you get is once you get out in the marketplace.

The fact of the matter is if they plan to get a job, in many cases, the first thing employers are going to look for is whether or not they have a college diploma, and it does make a difference. So I don't think that not going at all should be an option. I think there's a lot of things you can't put a price tag on that a student learns when they're at college.