Friday, February 17, 2012

The scramble to pay for college

Every year, the anxious parents of teens who have graduated high school and have been accepted to colleges of their choice (or not) scramble to get money to pay for their kids. This mad dash to get hold on loans were made easier in years before since the parents could tap into their home equity and just borrow against their house but with the housing collapse and tighter lending restrictions imposed by the bank, this scramble have now become a stampede. Most of the parents rely on loans to pay for their college kids and even that is not enough and money comes from all places all of which put extra burden on parents and students. Federal loans and private loans take up the majority of the loans, but besides that savings of parents and working during the college years also helps in the paying for college.

Another option which is coming up is to forego the dream colleges and take the first two years in a community college and then transfer to a four year college. Although a heart break for many kids but it can be a choice between graduating debt free and graduating with crushing debt because you don’t know that if you are going to get that high paying job that you think you can get. The choices are vary stark and the solutions are not that much since every family has a different financial situation which may change suddenly and can damage the chances of even going to college in the first place.

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