Content provided courtesy of USAA.
By Chad Storlie
The Consumer Financial Protection Bureau (CSFB) just released a sobering new statistic surrounding college debt. Most of us believe we know what it is already. Let me take a guess, "The Millennial generation is once again selecting colleges and universities that are too expensive and financing their education choices with student debt." Am I right? I am NOT right. The CSFB reports that it is parent and grandparents that are the fastest growing segment of those taking on new and higher amounts of college debt. A high level of student debt in the high-income earning years and on a fixed income during retirement are not secrets to a happy retirement.
Parents and Grandparents are starting to be seen as another go to group like banks, college financial aid offices, and scholarships to finance student higher education studies. What is so disturbing about this trend is that where a traditional college student has 30-40 years to payback a loan before retirement, a parent or a grandparent may only have 5 to 10 years to pay off a student loan in addition to existing financial commitments (mortgage, car, etc.) and higher health care expenses. There is no financial calculator available that makes it a good decision for Parents and Grandparents to take on student loan debt when they are close or in retirement.
Here are a selection of ways how Parents and Grandparents can help enable their child or a grandchild to have a successful college experience.
Helping a child or a grandchild determine what their best path in higher education will be is a rewarding task. That reward comes from helping determine if they can complete college. Finding a college with a great career outcome at a reasonable cost, and offering limited financial support that will not endanger your retirement. Finally, apply this advice to yourself when considering a degree before returning to school. Higher education must be completed successfully in a timely manner with limited debt in order to help a career succeed.