Mar 15, 2018

How to Send Your Kids to College Without ANY Debt (my new financial goal)

I recently read a fantastic book called Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents, and it's helped to change my thinking about college. First off, I am now absolutely determined to send my boys to college without any of us taking out loans. Second, I am convinced that it will be possible to do so.

How to Send Your Kids to College without ANY Debt

That said, I realize there will likely be compromises that need to be made, the biggest one being that they may not be able to attend their first-choice school. But that's a bridge we'll cross when we come to it. My kids are in seventh and fifth grade right now, so we're not even close to drawing up lists of schools to consider.

If you want a more detailed discussion of Debt-Free U, check out my other site, LAUSD Magnet Schools. Here, I'll share a few things that are logical first steps in preparing to pay for college.

Learn how the system works. If you went to college, you might remember the FAFSA, or Free Application for Federal Student Aid. It's the one financial aid application you pretty much have to fill out in order to get any kind of financial aid for college and grad school.

A key concept related to the FAFSA is EFC, or Expected Family Contribution. Based on the information you provide on the FAFSA, you'll get an EFC, which is the amount the government says you should be able to pay that year for your child's education. Low-income families can have a low EFC, which helps them get more financial aid. But it seems like middle-class families and even many lower-income families are assigned EFCs that are unrealistic. I just read about one single mother with a $65,000 annual salary who has an EFC of $40,000! I am expecting our EFC to be painfully high and that we will therefore be ineligible for any need-based financial aid.

One other note: "Financial aid" includes loans. As in, when you get the financial aid package from a school, explaining the aid they are giving, it frequently includes loans as a form of "aid." For example, if the total cost is $30,000 and your EFC is $10,000, they might give you $10,000 in need-based scholarship aid, and $10,000 in loans. I know student loan debt is often touted as "good" debt, much like a mortgage, but Debt-Free U makes some compelling arguments about why that's not the case. This Forbes article explains why parents especially shouldn't take out loans to help their kids.

Merit scholarships do exist. They might be difficult to come by, but they are out there. However, you have to earn them. I've been learning about what that takes, and not surprisingly, a lot of it comes down to good grades and high test scores. It also helps to do volunteer work and be passionate about something. Of course, it's a difficult balance between encouraging your kids and stressing them out too much. I try to remember to emphasize that my kids should do their best, and that effort matters more than results (and that when you put in the effort, the results usually come).

Save, save, save! I wish California had a pre-paid tuition option for state schools, because I'd be all over that. It's a big enough state that I wouldn't feel bad about telling them they have to stay for undergraduate work, at least - they can still get plenty far away enough from home. Unfortunately, all we have is a 529 plan. Which, of course, we are contributing to. But balancing college savings and retirement savings is tricky, to say the least.

There are a lot of schools out there. Until I started talking with friends who have high schoolers and recent grads, I'd never heard of a couple of schools that are less than 40 miles away from my house. One of my friends hired a private college counselor, who helped her son find some smaller schools that they wouldn't have known about or considered (in addition to helping him write his essays and get his applications in).

High school counselors don't know a lot about paying for college. I'm sure there are a lot of great high school counselors out there, but I'm also discovering that many focus solely on helping your child get into a school, and completely ignore the financial aspect of the process.

There are some really nice financial breaks available to California residents at UC schools. I don't know if we'll qualify for any of them, but I want to spread the word about them because if you're eligible, they can be a huge help!

This post contains affiliate links that help support this site at no additional cost to you. Thank you for using them! You can read CFO's full disclosure here.


Qwendykay said...

I am super interested in all of this! I have a 6 and a 9th grader and I’m reading debt free U. We are hoping to have our 9th grader go the dual enrollment route so he will have an AA at high school graduation and then can transfer to a university for two years to finish up.

Chief Family Officer said...

Wow, that will definitely save a lot of money!!