 These days, financial experts like John McDonough are giving parents the same
advice.
"Can you afford the college that will give them the best chance in life? Will
paying for their education force you to have to work well into your golden
years? These are the questions I ask parents every day," says McDonough, CEO of
Studemont Group College Funding Solutions,
CollegeFundingFreedom.com, which
offers advice for parents worrying about how to pay for their child's education.
"Many parents really don't know how to begin answering these questions; they
are afraid of walking into a financial situation that they won't be able to
safely walk out of. But the alternative -- saddling their children with debt
well into their 30s and 40s -- is not an appealing alternative."
McDonough reviews four disturbing trends in the challenge of paying for a
college education:
Adults in their 30s have 21 percent less net worth than
30-somethings 30 years ago, according to a new Urban Institute report. Why?
Much of it has to do with high-interest student loans and credit card debt.
The return on investment of a college education is excellent -- college
grads earn 84 percent more than those with only a high school diploma,
according to Georgetown's Center on Education and the Workforce. But paying
off that investment without outside help is exceedingly burdensome for a
graduate.
Student loan debt is even
greater than credit card debt: That's right -- topping all Americans who
have made poor decisions with their credit cards are ambitious high school
graduates, whose collective student load debt shoots past $1 trillion! More
important than this being a crucial social epidemic, it's potentially a very
real problem for your child. President Obama scored some political points in
identifying with most Americans when he said his student load debt was paid
off only after he was elected to the U.S. Senate. Two-thirds of students
leave college with some form of debt, according to the Federal Reserve Bank.
Fluctuating interest rates: Recent
controversy over interest rates of federal Stafford loans adds to the
insecurity of borrowing as a college financing strategy. Given the
unpredictability of Congress, which allowed the U.S. credit rating to drop
while standing on political principles, one can't reliably predict whether
interest rates will rise or fall.
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Your children
cannot refinance their loans: While borrowers who have
racked up tens of thousands of dollars in gambling debt can
refinance their payments, student loans remain at fixed rates.
In collecting money on student loans, there is no statute of
limitation, and today it's very common -- the norm, actually --
for student loan holders to take nearly two decades to pay off
their debt. With the annual average cost of public universities
exceeding $22,000 per year, and the same often surpassing
$50,000 at private universities, it's no surprise.
___
John McDonough is the managing member at Studemont Group, which
is primarily focused on helping retirees gain peace of mind with
unique market rescue and recovery programs. He is also founder,
president and CEO of Studemont Group College Funding Solutions. His
experience in the financial services industry includes being
managing partner at Granite Harbor Advisors in Houston and
divisional vice president of AXA Equitable/AXA Advisors, the
third-largest insurance company in the world. McDonough is a member
of the prestigious Forum 400, a Top of the Table qualifier for
Million Dollar Round Table, an active member in National Association
of Insurance and Financial Advisors, and Society of Financial
Service Professionals. He is also an active board member for First
Financial Resources. He has completed the course work to sit for the
Certified Financial Planner professional designation exam from Rice
University.
[Text from file received from
News and Experts]
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