Editors note: We asked each of our Top 15 to tell us a story about a money-related blunder that they've made.
The REAL Cost of Higher Education
One of the biggest blunders I’ve ever made is how I paid for my college tuition. Like most people, I did not plan for my college. Instead I jumped into tackling the finances with little insight. This caused my family and I to miss out on many opportunities to save money.
My story is simple. I dual enrolled at Macomb Community College and Oakland University to get my Bachelors in Marketing. I met with my advisor to ensure I would only take classes that would transfer to Oakland University. I lived at home so I would not have to pay the ridiculous room and board fees that many colleges have. I met with the Financial Aid office, filled out my FASFA and did what needed to be done to secure student loans; I failed to thoroughly read through the terms and conditions. I took my classes, studied hard, got my degree and followed the same process to obtain my degree from Specs Howard.
The fact is that I missed out on a number of ways to save money.
I did not take advantage of the 64 credits that I could have transferred to Oakland University. If I would of planned out my course load to maximize this, I would have saved close to $5,000.
My parents also did not open up a 529. If they had done so, this would have helped tremendously. All the money that you earn on your 529 investments- dividends, interest and capital gains- passes tax free if you use the account to help pay for higher education. Some states also have prepaid plans where you put money up front to buy a fixed amount of tuition in the future. This helps hedge the risk of tuition costs skyrocketing in future years. Many states also offer tax breaks for people who invest in their own states plans. If I would of done this I would have saved a significant amount of money through tax breaks as well as lower interest payments on my loans.
I also did not take advantage of paying the interest on the loans when I was in school. I continued to defer my loan even after I got my bachelors at Oakland and started my schooling at Specs Howard. This caused all of the interest to be tacked on the principle and could have easily been avoided by paying the interest.
When first taking out my student loans, I did not understand all the terms and conditions. I now know that student loans cannot be disclosed on bankruptcy and Congress has voided many consumer laws. This means that student loan debt is toxic debt that must be paid off as soon as possible.
I highly encourage everyone to visit the following website before enrolling in college. It shares some of the horror stories that families have been through by not properly planning their finances for college. http://studentloanjustice.org
Additional websites to consider:
www.collegeboard.com (Explains the college process in detail)
www.finaid.org (Explains Financial Aid in detail)
www.federalstudentaid.ed.gov (Detailed information on Governmental Programs)
www.meritaid.com (Various Scholarships listed by State)
I wish I would have researched and paid more attention to the details when signing for my student loan. I am now going to end up paying much more on my student loan debt that I ever anticipated. With the high unemployment in Michigan, it is extremely hard for college students to find work and having the burden of school debt does not help when you’re worried about paying for daily necessities. No matter what age you are, make sure to pay attention to the terms and conditions before signing anything because you are the one who has to deal with the consequences in the end.
On a positive note, my student loan experience has helped my young sisters be smarter when signing for their student loans. I hope these tips will also help you before signing on the dotted line.