The downturn in the economy has caused a lot of parents - and students, too - to rethink how they are going to pay for college in the coming years. Kara McGuire discusses one alternative some parents have come up with in her article for the Minneapolis Star-Tribune, Pay Dirt: Put College Pay Plan to Paper.

The alternative McGuire discusses in her article is something like a contract, between parents and their children, that outlines who's responsible for what expense. One family decided that their son should pay for his own books, but that they would foot the bill for everything else.

"[D]iscussing how to pay for college is more critical than ever now, given the recession, the negative performance of many college savings plans in 2008, tougher credit standards, lower home values and steep tuition increases," says McGuire.

As much as they may want to, some parents simply can't afford to give their children the same deal they received when they were in college. But having students contribute to their own education isn't such a bad thing. "[T]hey're less likely to skip class when the bar down the street has $1 burger night," McGuire surmises.

Parents and their children can get together and get specific about how much each will contribute toward college expenses. Some parents also include academic performance in their agreements. It doesn't really matter what kind of arrangement parents make with their children. What matters, according to McGuire's article, is that some sort of formal agreement be put down on paper and signed by everyone.

The difficulty in paying for college and the extra responsibility on the shoulders of students may make paid internships even more desirable and harder to get in the coming years.

Posted by Candice Arnold on January 15, 2009 at 2:06 PM | Leave a Comment (0)

Hiring is expected to be down in 2009 and chances are, the number of students enrolling in four-year colleges and universities will be down, too. College tuition goes up every year and student loans are getting harder to come by. Savvy parents, who have very young children, are taking advantage of 529 savings plans and programs like UPromise to prepare for future college expenses.

Parents whose children are already in college or hoping to attend within the next few years have options, too. Although FAFSA is always the best place to start, parents can also apply for PLUS Loans through other sources. These loans are great if you can get them because they aren't based on income. There's no such thing as having too much money to qualify. But great credit history is must, I'll bet.

Private student loans are another way to pay for college, but are likely to be tougher to get in the wake of recent mortgage foreclosures and job layoffs. Private lenders will probably want concrete proof that their money will be repaid.

Sites like NextStudent.com have advice and resources that can help parents, students and recent graduates to understand where and how to get the money they need to pay for college.

Posted by Candice Arnold on January 7, 2009 at 1:26 PM | Leave a Comment (0)