Higher education policy changes are on the horizon with the new administration coming in January. A comprehensive college savings plan, such as a 529 plan, is a good way to prepare for changes in student loans and college tuition costs. Proper research maximizes growth opportunities for 529 plans to fund future college expenses. Having a sustainable “savings” budget helps to minimize any overspending during the holidays and keeps long-term financial goals a priority.
Kids and Money: What Trump’s election means for the cost of higher education (Reading Eagle, November 28)
With the new administration coming in January, we can expect to see some changes in higher education policy. Privatization of student loans and income-based repayment programs will change the way student loans are issued. By reducing the “administrative bloat” caused by federal regulations and compliance paperwork, colleges should be able to lower tuition costs. There is also speculation the Department of Education will be cut or shut down, which directly affects K-12 programs and could signal changes to current higher education policy. The best way to prepare for upcoming changes is to create a college savings plan that will sustain itself long-term. Investing in a low-risk savings option such as a 529 plan eliminates the need for student loan debt in the future.
4 student loan tips that could backfire (USA Today, December 1)
Managing student loan debt can be difficult and is unique to every borrower. Understand what options are available to maximize payments and reduce the overall cost of the loan. Knowing the difference between federal debt consolidation and student loan refinancing can often result in better loan terms for the borrower. Switching to income-driven repayment programs is a good option for some borrowers, but you need to reapply annually and any debt that is forgiven will be taxed as income. The easiest way to minimize student loan debt is by taking a small loan initially and making payments a priority after graduation. Using the Free Application for Student Aid (FAFSA) allows borrowers to maximize free aid and reduce the amount of the student loan.
