Invite Education CEO John Hupalo was featured on the Experience Pros radio show talking about his new Book “Plan and Finance your Family’s College Dreams” and how parents are dealing with higher education costs today.
During the 9 minute interview, hosts Angel and Eric raise key questions that families are dealing with when it comes to paying for college, bringing up topics affecting many today, like savings plans, gap year and more. Since college is not getting any less expense, parents are concerned. Some highlights from the interview.
John: “94% of parents believe college costs will impact ability to pay for retirement. College costs are increasing at a rate above inflation. Parents are starting to scratch their heads and say “Is the cost really worth what’s on the other side?” Hopefully a graduate without too much debt in their pocket.”
How do we make this affordable if we didn’t start saving when they were toddlers?
John: “Not many families started early enough. 529 plans prevalent today were just barely getting off the ground 20 years ago. Some families with children in high school woke up today without enough in their savings account, and they ask what do I do? We say, take a deep breath, it will be ok. There are opportunities to receive scholarships, need based aid, and merit based aid from the school. It’s a mistake to rule out any particular college before actually going through the financial aid process and getting a financial aid package back from the school. They may be pleasantly surprised. Even for juniors or seniors in high school, by the time they graduate from college, that might be 5 or 6 years down the road, so saving a dollar today to offset some of those costs tomorrow is a good plan. Every dollar you can put towards actual reduction in that cost of school is a dollar less that has to be borrowed, and that’s a good thing.”
Is “gap year” a good idea?
John: “It depends on each student’s circumstance. For most kids taking a gap year, it’s a great idea… For some students it’s an opportunity to go out and work a little bit, maybe put a “down payment” on their college education so they don’t have to actually borrow as much. Other students may not be properly motivated. If you look at the data, students who do not complete the college course they are significantly more likely to default on their loans. So they have debt and no degree — there 0-2. That’s not a circumstance anyone wants their child to be in. So a gap year could really be an important maturity year and an opportunity to earn some money.”
What about student’s that are dropping out because of debt? Is debt impacting graduation rates?
John: “I think that’s right. The answer is better financial education up front. What parent would say to their high school senior, “Go to the local car dealer and pick out the car of your dreams and then drive away fully financed without terms that you actually understand.” Sometimes that’s what we do with some of our students, pick the college of your dreams, we’ll figure out how to pay for it later. That just doesn’t work any more.”