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The dilemma for many parents of college bound students is the question of what is more important: their retirement or their kids' college education. According to a national survey conducted by Sallie Mae, families in the Northeast pay 70% more for their kids' college education than the rest of the U.S., so it seems natural that middle to upper-middle class families may expect to work 5 to 7 years longer than planned in order to pay off college loans.
Remember, you borrow for college because you can't borrow for retirement. For some families, pre-funding their retirement using a private pension plan may help because it could increase their free scholarship money. So, two things happen when parents fund a private retirement plan: they decrease what they pay to colleges because they are now eligible for increased scholarship monies. This strategy is not for every family because not every college is generous with their free scholarship money. In addition, some colleges are more likely to meet a 100% of a family's eligibility if the student has high SAT scores and a high GPA. The second benefit is they have now pre-funded their retirement plans. Contact me today for a free college planning consultation. Comments are closed.
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