FARMERS BRANCH, Texas (4/24/13)--College costs are expensive, so parents and students need to be prepared and do research. Credits unions should be ready for members' questions on the matter and help guide them, according to a Texas Credit Union League Blog Talk Radio broadcast Tuesday.
The show, "Your Money, Your Matters," featured Linda Birt, relationship coordinator with People's Trust FCU in Houston. The show was hosted by radio personalities Linda Webb-Manon and Rick Grady of the Texas Credit Union League, and Todd Mark, Consumer Credit Counseling Services. They discussed the importance of planning and budgeting for college and taking advantage of available grant and scholarship dollars.
"College is expensive," Mark said. "Even at a state college, the costs are $15,000 to $20,000 per year." The show's panelists talked about statistics indicating that between 2008 and 2010, college tuition nationally increased 15%--fueled by budget cuts.
Limited budgets often impact college choices at the last minute, the panelists said. "It happens all the time--parents don't know about costs," Birt said. "It's never too early to learn about college costs. There are so many college scholarships available. Start [researching them] early. Get the child involved as early as possible; it is then more meaningful to them."
A key point is to understand the difference between federal government loans and private student loans, Birt added. Private loans have variable interest rates. Those interest rates are not tax deductible, the loans cannot be consolidated or deferred, and students sometimes have to make payments on the loans while still in school, she explained. "There are so many types of grants and scholarships out there, private loans should be a last choice," Birt said.
"Resources are out there, you need to network and find them," she added, noting that credit unions and employers are a great source for scholarships."
If students choose to study specific fields, organizations in those fields will provide scholarships for certain costs, Mark said. To find scholarship money use the Internet and ask your librarian. "They have catalogues of this material," he explained. "Also ask high school guidance counselors."
When asking for money, meeting deadlines is crucial, Birt said. It also is important for parents and students to understand the obligations of repayment and to keep up with loan payments, she added.
The Credit Union National Association is lobbying the federal government to allow student loans of a longer duration than the current 15-year standard because most borrowers are taking out more loans for larger amounts (News Now April 17).
Earlier this month, CUNA released the result of its first annual High School Student Borrowing Survey. It found that nearly half of high school seniors don't know how much they will need for college costs. (See also News Now story "CU Advantage Noted in Fox, Huffpo Coverage").
Eighty-three percent did not know the interest rates for student loans, and 77% didn't know the duration of their existing or anticipated college loans, CUNA added.