Should You Pay for College this Fall?
College is an enormous expense, and one many parents are reconsidering as the novel coronavirus pandemic continues to gain steam across the country. This fall, many colleges and universities are keeping students away, instead offering virtual learning. But is this an expense that parents should happily shell out for?
Students who are financing their education are also considering whether to pay for a year’s tuition or take a break until things calm down and school can return as normal. Student loan debt is very difficult to discharge, so careful consideration of your options is warranted.
Can You Afford College?
An interesting article in CNBC looked at the considerations for whether to pay for college this fall. One concern was that many parents have seen a reduction in their income, either because they have lost a job or because their hours were cut. Self-employed individuals have also seen their incomes nosedive.
With less income, many parents and students will have to turn to increased borrowing. We encourage them to fully understand the costs of what they are signing up for. For example, government loans have many repayment options that might sound like a good deal—extended repayment, graduated repayment, income-driven repayment, etc. However, these repayment plans simply increase the amount a borrower pays in total—sometimes substantially.
Borrowers should also contact their schools to ask about financial aid. When parents filled out the Free Application for Federal Student Aid (FAFSA), they submitted income information that was two years’ old in most cases. If you have suffered a drop in income since then, you can ask the school about how to appeal. Schools might have additional grant money that they could offer now that they understand the family’s full financial situation.
Schools received money under the federal CARES Act passed in March 2020 to offer emergency grants to students. This money, which does not have to be repaid, can be used to cover tuition, housing, course materials, and other expenses. Contact the financial aid office to ask about how to apply.
Is a Year Off the Best Step?
CNBC floats another idea—stepping away from school, at least temporarily. This isn’t an unreasonable decision. For one thing, if your child is studying virtually, you have to ask whether they could get a virtual education much cheaper through a different university. There is no reason to pay Duke University tuition for a University of Phoenix experience.
- Studying for a year at a local community college that might be holding in-person classes.
- Taking classes through a less expensive online college.
- Sitting the year out and gaining work or volunteer experience that will help the student later in their career.
If you choose to study for a year at a different school, check whether the credits will transfer. Not all of them do, and students who hope to get their degree from a different institution might have to go to school for an additional semester or year.
Can You Free Up Money?
At Nowack & Olson, PLLC our Plantation bankruptcy attorneys understand that college is a serious expense. Nothing is more important than your child’s education, so parents might consider whether they can free up money for tuition by eliminating other debts. If you would like to discuss bankruptcy, contact us today to schedule a free consultation.