Parents: Be Prepared For The Cost Of College
The Cost Of College: Be Prepared Parents!!!
The cost of college education for parents can be overwhelming. Cost of College has escalated throughout the years and many parents with children approaching college need to start thinking about the cost of college and the means of helping their children. A college education can cost as much as $50,000 per year if the student plans on attending a private out of state college or university. Parents should plan on understanding all of the costs and expenses that comes with a college education years before their child enters college and this should not be done at the last minute. There are options for parents to get their finances in order to help pay for their children’s educations. It can be a combination of student loans ( both private and government loans ), internship/co-0p work programs, or doing a cash-out refinance on a home witch has plenty of equity and paying the cost of college education with the proceeds from the cash-out refinance. Cost of College varies depending on the type of school the student plans on attending. The most expensive cost of college are out of state private colleges and universities which can cost more than $50,000 per year. Two year community colleges offer the best bang for the buck where for a few thousand dollars per year, a student can get a great affordable two year associates degree and can set the foundation of transferring to a four year college or university where they can get most or all of their two years of undergraduate college credits from the community college transferred to their new school.
Cost Of Tuition At Colleges And Universities
There are two year community colleges, four year public state universities, and four year private colleges and universities. The cheapest and most affordable cost of tuition are the two year community colleges followed by the four year state universities. The most expensive are the four year private colleges and universities where the cost of college can surpass over $50,000 per year. A recent study and statistics of cost of college by The College Board stated that the average cost of tuition at a four year public state university averaged $9,500 per year. Out of state residents paid an average of $23,000 per year to attend a public 4 year university. Out of state residents pay a much higher cost of tuition than in state residents on public schools. Private colleges and universities averaged anywhere between $30,000 to over $50,000 per year in tuition.
Cost Of Room And Board
Unless your child attends a local community college or a school that is within commuting distance, your child will incur the cost of room and board expenses. Room and board can easily be more than $10,000 per year. Room and board covers a dorm room with necessary furnishings such as a bed and desk and a meal plan where at least three meals per day is covered. Besides the cost of room and board, the student will also need extra money for bedding, linens, dorm furniture, laundry services, snacks, and just spending money which can add up to another several thousand dollars per year.
Cost Of Books And School Supplies
Text books and study aids needed can cost an additional $2,000 annually. Besides text books and study aids, the student may need other things such as a computer, laptop, or other supplies that may add to the annual cost of college. Computers is almost a necessity and a desktop and/or laptop computer plus its accessories can easily cost $1,000 or more dollars. Most students need cell phones and internet services which can easily add up to more than $1,000 per year.
Spending And Entertainment Costs
College is a time where students will get a once in a lifetime experience, not just in learning and earning a college degree, but where they meet lifelong friends and have a great time. College students will need money for entertainment where they will want to go out to restaurants and bars. Students spend all nighters studying for midterms and final exams and will need money for snacks and coffee. Many students unwind during the weekend and go out to the ballpark, movies, shows, or other places that offer entertainment and this all comes with a cost.
Cost Of Travel
If you are attending a local community college, there will be the costs of fuel and auto expenses. For those who attend public or private colleges and universities, they may incur flight fares or other transportation costs when they visit home during the holidays and/or during school breaks. These cost of travel need to be taken into account as well.
Other Cost Of College Expenses
There are other cost of college expenses. Whether they are for snacks, drinks, cigarettes, dating expenses, or other miscellaneous expenses, these costs needs to be taken into account and can easily add to to more than $2,000 per year.
Cost Of A Four Year College Education
The cost of a college degree can be enormous and parents needs to prepare an overall budget on the cost of college for their children. Many folks have not one but a few children who attend college at the same time where it can be overwhelming on their budget and impact their lifestyle. Student loans are the most popular way of financing a college education and most parents will need to co-sign on their children student loans which can affect their ability to obtain a mortgage loan if they are intending in purchasing a new home while their children are in school. If you co-sign for a child’s student loan, that will affect your debt to income ratios which can affect one’s ability to purchase a home.
Deferred student loans is no longer exempt with FHA Loans. In the past, if you had a deferred student loan that was deferred by more than 12 months, you were exempt from counting that student loan payment from your debt to income ratio calculations but now that is no longer the case. If you have deferred student loans, lenders will require that you get a payment statement that states how much your monthly student loan payment will be when it is out of deferment or the lender will get 1% of the student loan balance and use that as your monthly student loan payment and use that figure to calculate your debt to income ratio.
It is difficult to state a set figure for the cost of a four year college education. It depends on the type of school and the location you attend. A combination of going to attending a two year community college and transferring to a four year state is probably the best bang for your buck. Going to a four year out of state private university like Harvard University will probably cost you a total of $200,000 for a four year college degree.
Graduating on time is also key. Many college students do not graduate in four years and extend their graduation to five or more years because they end up dropping courses or take a lighter work load. This will cost much more, not just in tuition, but other college costs associated with going to school.
Cash Out Refinance Mortgage To Fund Cost Of College
All parents love their children and will do anything for them. There are some parents that do not want their children to get burdened with tens of thousands of dollars in student loans and want to pay for the children’s college education. One popular way on paying for a college education is to do a cash out refinance mortgage if the parents have equity in their homes. Proceeds from a cash out refinance mortgage is tax free. The maximum amount that a homeowner can take out with a FHA Loan is 85% Loan To Value. The maximum amount a homeowner can take out with a Conventional Loan is 80% Loan To Value. Homeowners with a VA Loan can take out 100% Loan To Value with a VA Loan.