Families with college-bound students find themselves slammed by a one-two economic punch: shrinking household incomes and rising college costs.
Families with college-bound students find themselves slammed by a one-two economic punch: shrinking household incomes and rising college costs.
As treasurer for the City of Chicago, I want to help families make the most important investment they can: an investment in education.
Student debt has now surpassed credit card debt in the U.S. More than $800 billion is owed in student loans. The average college senior graduates with $24,000 in debt, and is facing the bleakest job market in decades. To make matters worse, student loans cannot be written off due to bankruptcy.
Families need to navigate the sometimes intimidating paperwork and jargon that can keep them from getting the help they deserve.
They can get help from high school counselors, organizations like Ladder Up, The Center for Economic Progress, and they can get it in English or Spanish.
The first strategy should be to find any scholarships available for their children: these could be based on scholastic, musical or athletic abilities. After all, free money is always better than borrowed money.
The next step is to explore student grants and low-cost loans. Thousands of dollars in state, federal and private money is available to students, but these limited resources run out fast, so time is of the essence. Applications can be filed anytime after January 1, and should be completed by the end of March.
The documents required to file for the Free Application for Students Aid are the same as for tax filing. Every year there are dozens of free events around the city that combine the two services: tax preparation and the completion of FAFSA forms. Filing income taxes helps streamline the financial aid process.
Families need the help more than ever. At current rates, the cost of a college education is doubling every 12 to 18 years. That means for students earning a 4-year degree the last year of college can cost 25 percent more than the first!
In the past, five years of college costs have increased by almost 40 percent, while the median income for families has grown by only 1 percent. Unfortunately, the rising costs are pushing college out of reach for a growing number of families.
Some of these families should consider community colleges and vocational schools as alternatives. They should also be very careful about claims made by for-profit schools. Many times for profit colleges and universities exaggerate the value of their degrees and the opportunities available after graduation.
For more information log onto www.chicagocitytreasurer.com or www.economicprogress.com.
Remember: it’s your money. Your choice.
Stephanie Neely is treasurer for the city of Chicago.
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