In This Chapter

Borrowing is not bad, reckless, stupid, or an admission of some type of financial or parenting failure on your part. In fact, it might be one of the single wisest things you can do to ensure that you or your child gets the college education you or he needs.

Think about it—a family earning $150,000 per year earns more than 94 percent of all American households. They’re easily considered high income and probably could be labeled rich by most people’s standards. Yet, a year of college at many schools can easily cost $30,000, or one fifth of their annual income. If they live out of state, that same year of college could easily cost $50,000, or one third of their entire income.

Now imagine that they’re the average American family, which means they’ve two kids in college at the same time or back-to-back, they earn half as much, and they haven’t managed to save much for college. Their annual college costs can actually exceed their after-tax income for the year!

Regardless of how much money you make, how much you’ve saved for college, or how willing you are to apply for scholarship after scholarship, student loans might be a necessity for you. That’s more than okay and should be embraced. Knowing that they’re a reality, your job becomes using the right programs and using them wisely, as well as utilizing the best repayment options, which I talk more about in the next chapter.