Making the Choice on May 1, National College Decision Day.
May 1 is known as National College Decision Day, as it is often the deadline for students to make deposits to attend the college of their choice. With so many students applying to more than one college, this day becomes even more important since students now have to pay their deposits to hold their spots. Before you make that deposit to your dream school you need to make sure that you know how you are going to pay for the next 4 years. In today’s financial climate many adults are struggling to balance their savings between Retirement Funds for themselves and College Funds for their children so that could make the decision on what college to attend ever harder.
According to Business Insider, “Future college costs are expected to inflate 5% per year, taking annual private college costs (for tuition, fees, room and board for a year) from $39,518 today to $90,576 in 2030.” So, with these increases in costs continuing to elevate every year the temptation to hit the retirement account might be hard to overcome but, Timothy Parros of Parros College Planning LLC, an Ann Arbor based college planning company, believes that in the long run, this may not be the smart option.
“College becomes real to the parent the closer that their kids get to college age, but retirement seems a long way off”, says Timothy. “If you don’t start saving for retirement early in your life, balancing your savings can become difficult and you may be forced to choose between saving for retirement or saving for college.” Parros believes that if a family is forced into this corner, saving for retirement is the better option in the long run. He stresses that a student can graduate and earn an income to pay off the loans they have acquired but an aging parent doesn’t have the same time frame to continue to save for their retirement.
Tim also stresses that there are ways to reduce the cost of college, including graduating in 4 verses 5 years and selecting the right college from the start. But what if it’s too late and you’re already at the critical point where it’s one or the other? Parros College Planning can help you navigate these tough decisions, whether it’s saving strategy, budgeting, applying to college, or looking for scholarship applications, their goal is to find the most merit based aid possible.
“We have been assisting families with their college planning for 10 years and have seen amazing college offers to our students. Every year the college admissions game rules change and the best way to handle this is to plan.” Parros also stresses that in the end it is better to know the costs and how you are going to manage them rather than shooting from the hip and hoping for scholarships.