These Big Three Financial Priorities Come Before Paying for College
CFP Board Ambassador offers tips for to help families avoid heavy college debtloads
Livonia, Mich., Oct. 10, 2017 – This year’s federal financial aid forms became available this month, opening the door for parents and students to take advantage of $120 billion worth of federal grants and low-interest loans, according to CFP Board Ambassador Robert Schmansky, CFP®.
“Having a conversation about the financial aspects of a college degree is critical,” said Schmansky. “One strategy is to set limits that are affordable and discuss the options for keeping costs down like community college.”
Parents who sacrifice their retirement savings for their children’s schooling may unintentionally be creating a financial burden for their own children later. If parents don’t have enough to retire, they may rely on their kids.
An increasing number of Americans are on the hook for the younger generations’ educations. Older Americans are the fastest growing segment of student loan borrowers, according to a Consumer Financial Protection Bureau report released this year. From 2005 to 2015, the number of Americans age 60 or older with one or more student loans quadrupled from about 700,000 to 2.8 million, and average debt load owed by an older borrower roughly doubled from $12,000 to $23,500. About three in four older borrowers used the loans to finance children’s or grandchildren’s college educations.
Parents should make sure they have taken care of “the big three,” before they turn to college funding, according to Schmansky. In the latest contribution to LetsMakeaPlan.org, CFP Board lists those priorities:
1. Paying down consumer debt
2. Establishing an emergency reserve fund
3. Funding retirement
LetsMakeaPlan.org also offers links to help parents find free and low-cost college funding, such as by filing a Free Application for Federal Student Aid.
A CERTIFIED FINANCIAL PLANNER™ professional can help American families plan holistically for each generations’ financial needs.
ABOUT CFP BOARD The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. CFP Board currently authorizes nearly 80,000 individuals to use these marks in the U.S.
CONTACT: Dan Drummond, CFP Board Director of Communications, P: 202-379-2252 E:firstname.lastname@example.org Twitter: @cfpboardmedia
ABOUT ROBERT SCHMANSKY, CFP®
Robert Schmansky is the founder of Clear Financial Advisors of Metro-Detroit and Ann Arbor. Rob has over a decade of experience helping individuals and families meet their financial goals and overcome money concerns. He is frequently quoted in the media on issues regarding personal financial planning, and has been a contributing writer for U.S. News & World Report, Forbes, Investopedia, and Yahoo!Finance, and an investment expert for FiLife, a former Dow Jones/IAC joint Internet venture. He has been an adjunct instructor of economics and the required courses for candidates to sit for the CFP® exam. Rob was named a Top 100 Most Influential Advisor by Investopedia, 40 Under 40 financial planning professional by InvestmentNews, and he is the 2013 PlanPlus Global Financial Planning Awards North American finalist.
CONTACT: Robert Schmansky, CFP® P: 248-677-1762 E: email@example.com W: www.clear.financial Twitter: @moneyclarity