How will we pay for college?

June 17, 2015

This seems to be a question that is on the minds of many married couples with college bound children.  Those numbers that we hear about for private colleges, $45,000-$55,000/year, are now staring many people in the face.  They have become a reality.  Unfortunately, with the many expenses of raising a family these days, so many people have not saved for their children’s college tuition.  Also, many people in the Massachusetts area are solidly middle class and will receive very little in aid.  Maybe some subsidized loans and merit aid if the student is bright.

 Let’s suppose the student receives $12,000 in merit scholarships from a private college.  Sounds great until you do the numbers.  $55,000 per year less $12,000 in aid still leaves a $43,000 ticket – per year.  Now let’s suppose the parents are able to pay $10,000 per year and they have the student borrow the rest.  This will leave the student with loan debt of $132,000 after he graduates.  At a 6% interest rate and a 10 year repayment, the student is looking at a $1465/month payment for 10 years!  How can any young person start out with that kind of debt?

Please calculate the numbers before taking a leap like this.  The state college system is vast and offers many affordable choices.  Do not cave in to the pressure and hype surrounding a private college.  Your retirement plan and your child will thank you some day!


“This is a hypothetical example and actual results may vary, as individual circumstances will be different in each case and not indicative of any investment product.”


“This material is for general information purposes only and is not intended to provide specific advice or recommendations for any individual.  To determine which investment(s)/advice may be appropriate for you, consult your financial advisor prior to investing.”