By: Dr. Daniel B. Prescott, Jr.
In just a few short weeks, millions of parents in the Dallas-Fort Worth area will send their kids back to school. We all know that getting a good education is the most important thing one can achieve in life. And the more education we can provide our children, the better off they will be. There’s only one problem. Education beyond high school has become very expensive.
According to the U.S. Bureau of Labor Statistics, there has been a tremendously steep rise in the cost of college. In just the past decade, the Consumer Price Index for college tuition and fees have gone up an average of 63 percent. The price of required textbooks rose 88 percent and school-based housing costs have risen 51 percent. For families struggling to find a way to pay for schooling beyond a mere high school diploma, this is a real problem.
So, how do families approach this problem? What programs are available to help us? And how can you begin establishing an education savings account for your children? We have answers.
If you haven’t yet begun educational saving account for your child, you are not alone. It is estimated that as much as 44 percent of the population have nothing set aside either. Yet, that is. Depending on your child’s current age, do whatever possible to begin this process early in their lives. Beginning at birth, saving just $50 each month could become $20,000 by the time he or she turns 17, assuming a seven percent return on investment.
Parents who set up an education fund for their child early in life and contribute to it monthly can avoid playing catch-up later. Keep the payments consistent by treating them with the same importance as your other household bills such as the mortgage, rent or utility bill.
Never get discouraged with the amount that you’re able to save because the bulk of how your child’s education will be paid for is not solely dependent upon your account balance. Statistics show that, on average, only 23 percent of the total cost of higher education will be attributed to what you can save. The remaining amount can and will be covered by alternate funding sources such as grants, scholarships, student loans and other forms of income.
Paying for the rest of school can come in many forms and there is much in the way of financial assistance if you know where to look and how to take advantage of available scholarships and grants. Every institution of higher education maintains their own financial aid office. If there is a particular school you’re considering, plan a visit not just to the campus, but also to the financial aid office. There, you can make an appointment to meet one-on-one with a counselor, explain your personal situation and find suitable avenues to bridge the gaps in funding still needed.
Now it’s time to consider where to send your child for higher education. While there are countless examples of worthy students who earned their way to a scholarship at a prestigious institution through merit-based means, this may not be a reality for you and your family. And that’s fine too. If your child has the ambition to continue with school and receives either a high school diploma or GED, a local community college should be your goal. There are multiple common sense reasons for going this route if the cost of education is an issue.
First, community college tuition is a fraction of the cost of attending a four-year public or private college or university. Second, community colleges are just that-in your community, meaning that you can live at home instead of paying for student housing. Third, community colleges typically offer extremely flexible scheduling, allowing time to get or keep an income-producing job while you attend classes.
There are nine different community colleges within 40 miles of Dallas. They’re located as far north as McKinney, as far south as Lancaster, as far east as Mesquite and as far west as Fort Worth. Chances are, there’s one right in your backyard. Look them up by name: El Centro College, Eastfield College, Mountain View College, Brookhaven College, Richland College, Cedar Valley College, North Lake College, Collin County Community College District and the Tarrant County College District.
If you need to get your finances in order or establish a budget, come visit us at Transformance. You can make an appointment by visiting Transformance’s website, www.transformanceusa.org or by calling 1-800-249-2227.
Dr. Daniel B. Prescott, Jr. is the CEO of Dallas-based Transformance Inc., a fully integrated financial services capability non-profit. He can be reached at email@example.com.