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By: Katy L. Chase, CFP®, MBA
Securities
offered
Allied
Inc. (FASI), a sent,
registered
Dealer, Member
FINRA/ SIPC. your
Advisory s
Th e school
visits are
have
been through
made, First
letters
of Securities,
recommendation
and Broker
the Common
App submitted:
Financial Advisors, Inc., a Registered Investment Adviser dba Lighthouse Wealth Management (LWM). LWM is not a subsi
daughter has applied to her top picks for college next year (Yikes!). Now it’s time to sit back and relax until
the inevitable acceptances arrive in the spring, right? Wrong. Now is the time to determine the potential
fi nancial impact of college so your daughter can make an educated decision about her future.
$1.45 trillion. Th is is the amount of current student debt outstanding in the US. In order to understand
from where this number comes, let’s take a look at the cost of higher education with some local examples.
College
McDaniel College
Hood College
University of Maryland
Towson University
FCC (2 yrs.) + UMD (2 yrs.)
2017-18 Tuition & Expenses
$56,230
$54,840
$25,742
$21,878
N/A
Estimated Cost for 4 Years
$245,985
$239,904
$112,611
$95,708
$75,569
*6% infl ation for costs; refl ects all tuition/room/board/supplies with no scholarships*
Th ese numbers are estimates and can be
overwhelming; however, use them as a tool
when helping your daughter decide where
she’s going to live and learn for the next several
years of her young adult life.
Common mistakes and misconceptions
Picking her dream school (regardless
of cost).
We get it; you want to be able to give your
child everything. Getting accepted into her
dream school represents the culmination of
all her hard work. However, once the excitement of acceptance
wears off , the reality of cost hits hard. It isn’t fair to you as
parents, nor your child, to sign on the dotted line without fully
understanding the lasting implications of student loan debt.
Pretending to be able to afford any college.
College is expensive; pretending the cost of college won’t
impact your current budget is a recipe for accumulating large
amounts of debt, increasing stress, and throwing your family
off fi nancial course. Taking on the debt yourself or even co-
signing with your daughter means you are on the hook for all
of the liability.
Helpful tips and tricks
Align cost with earnings potential.
Take into account the subject of study on
which she’ll focus. Align the potential cost of
college with her earnings potential when she
graduates. Is she going to be an engineer? An
investment banker? An entrepreneur? Th ere is
a wide range of starting salaries for all of those
professions taught at the same school and
incurring the same amount of debt. Her ability
to pay back student loans is important to her
starting her life without drowning in debt repayments.
Pick a major that can be flexible.
Picking a versatile focus can help open up diff erent options
when looking for a full-time position aft er graduation. Th is
allows fl exibility in applying for a variety of positions and
not getting pigeon-holed into a specifi c skill set with few job
opportunities.
Long-story short: college is an exciting time for you and your
child. Create a fi nancial game plan that works for both of you,
and then talk about it with everyone involved so as to set clear
expectations.
Accept the fact that this is a big fi nancial decision and create a
game plan to address the costs head-on.
Katy Chase is a fi nancial advisor at Lighthouse Wealth Management and has been with the fi rm for over fi ve years. She and her husband, Tom, reside in the Lake
Linganore community. She can be reached at KATY@LIGHTHOUSEWLTH.COM with questions.
Securities off ered through First Allied Securities, Inc. Member FINRA/SIPC. Advisory services off ered through Lighthouse Wealth Management, a registered investment advisor not affi liated with First Allied
Securities Inc. Th e opinions voiced in this material are for general information only and are not intended to provide specifi c advice or recommendations for any individual.
LakeTalk January 2018 23