August 21, 2011

HIGHER EDUCATION BUBBLE UPDATE: Be Realistic About Planning For College Costs.

After many families carefully mapped out a plan to pay for college costs, the economy’s downward spiral forced them to rip it up.

State-budget cuts forced many colleges and universities to make huge tuition hikes. Job losses siphoned money for college savings accounts.

When home values nose-dived during the housing bust, students and parents lost the ability to tap home-equity lines for extra cash. The Dow’s wild swings have chewed up balances in 529 college-saving accounts, which often include stocks.

“Parents are desperate,” said April Osborn, executive director of the Arizona Commission for Postsecondary Education, which administers several federal and state grants that go to Arizona college students.

Don’t be desperate. Look for cheaper alternatives, which abound. If they miss out on the “college experience” because they start out at a community college and then finish as commuter students at a public university, well, that’s too bad but it’s not tragic, and it’s certainly not worth bankrupting yourself to avoid.

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