Why You Should Start Planning Early For College

Student loan debt is one of the fastest rising debts of this generation. Americans currently owe a combined of $1.34 trillion on their student loans. On average, college undergrads are paying 28% more for college than a decade ago, and 65% more than 20 years ago. To mitigate this, it’s important that if you or a loved one have a child attending college, or if you’re attending yourself,  that the financing of the education be in order.

Why You Should Start Planning Early For College

To Loan Or Not To Loan

One of the most common myths of college is that you have to take out a loan to receive a higher education. Too often, kids leave their parents at 18 to get a room and board at their favorite (and often more expensive) college, without little thought to any alternatives. For example, if a student were to stay in state and commute from home to attend college, they could have to pay $4,500-$5,000/semester, which is can be paid by working a part-time job while attending college. When this is not possible, however, utilizing grants, scholarships, financial aid, and student loan programs responsibly can be one of the most effective ways to pay for college.  Also, having a CFP® advisor look over your finances and develop a plan is essential. A CFP® is trained to help you map out a plan that properly fits your lifestyle and also brings forth important questions that may not of been thought about previously. 

Too Little Too Late?

This advice is great but what if you’ve already taken out student loans, and maybe not the best ones? Most people reading this article may fall into this boat. In this situation, there’s no point regretting your loans – what is important is to figure out the most efficient way to pay them off, given your situation. This doesn’t always equate to paying your loan(s) off the fastest. For example, if your cash flow is very tight, lower monthly payments may be a better option for you. Additionally, qualifying for PSLF (Public Service Loan Forgiveness) would be another reason you would want to prioritize lower monthly payments. However, for most people who can afford it, finding the way to pay the least total amount on your loan is most important. There are multiple strategies, talking to a financial advisor can really help you in a tight-knit situation and determine what options are eligible to you.


If you’re in a situation where you can attend an in-state college and work while receiving your education then do it – your wallet will thank you for earning a degree debt-free. However, if you must take out loans, be smart about it and know what grants, scholarships, and loans you can qualify for. And lastly, if you already have student loans, then consider consulting a CFP® professional who will help you pay these off in the best way possible, given your situation. Doing these things can save yourself – and those you know – a lot of money.

Post by Phil Ratcliff

Phil Ratcliff, President of rebel Financial, is a senior financial advisor that holds an AIF®, CFP®, ChFC®, and CLU® certifications. He started his career at American Express Financial Advisors in 2003, then moved to AXA Advisors for 7 years before founding rebel Financial LLC in 2013.

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