We interview Tutor.com CEO Mandy Ginsberg
How Will You Pay for College?
by Gary Foreman
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According to American Student Assistance, there are approximately 20 million college students. And, of that 20 million, nearly 12 million borrow some or all of the costs of college. With over $1 trillion in total student loans, many families struggle trying to save and pay for college.
Mandy Ginsberg is CEO of Tutor.com. Prior to taking the reins at Tutor.com, she attended Wharton Business School at the Univ. of Penn and was CEO of Match.com. She also has a personal interest in the subject. She is married with two children. We asked her for help in preparing families to pay for college.
1. What can families do to prepare to pay for college?
Families should do their homework and get a good sense of how much college will cost for their child or children. Today, four years of college can range from $40,000 for in-state resident tuition at a public college to $130,000 at a private college. And those figures don't include room and board or books. If you have a five year old, those costs will be significantly more in 13 years. Have a figure in mind and know how much you want to save.
2. You suggest that families consult a financial planner. What can a planner do for them?
Financial planners are often thought of as being for wealthier families, but many are reasonably priced and can help a family assess and understand their own financial and tax situation to give very targeted savings advice both for paying for college and retirement. Advisors can give you all the details about the different saving vehicles such as 529 plans. If you have a 401K through your employer, check and see if they also offer financial advisors.
3. One of your suggestions was to save a little. Can that really work when you could be looking at a $100k expense?
The cost of college can feel very overwhelming and it's easy to say that there is no way you can save enough. But let's say you gave up your daily latte and saved $5 a day for 18 years and it grew 5% annually. You'd have about $53,269 or just over half of the $100,000k you need. It pays to start early even if it's just a little because it really adds up.
4. I've always encouraged people to engage their child of any age in saving for college. What are some ways that the student can get involved?
I completely agree! College lasts four years but paying your loans can last 24 years and that often rests with your child so an open and honest conversation early on is a good idea. One way to get your child involved is to help them manage their own savings accounts. Children who earn money through part-time jobs, gifts, and allowance can be encouraged to use a third for purchases, give a third to charity, and save a third for college.
5. What else should parents do?
Parents can also work with their child to look for scholarships. There are great sources online through sites like the College Board and I encourage parents to speak to school counselors too. From the research I've done, there are literally billions of dollars available to students and every family should take advantage.
Also, I always tell parents never put money aside for college at the expense of your own retirement. Any financial advisor will tell you that can get loans and aid for college, but you can't for retirement. Fund your own accounts first, and then put as much as you can aside for your child.
Calculator: What It Takes To Save For College
6. Tell us a little about Tutor.com.
Tutor.com is the best way for students to get personalized help for all their academic challenges from daily homework and tough courses to preparing for the SAT or ACT exams and writing a college essay. We have more than 3,000 experienced tutors who are available around the clock to make sure students get the right help, right when they need it. We offer every family a free tutoring session and encourage them to try online tutoring as a cost-effective way to get great grades in any subject. Online tutoring is about half what you'd spend on an in-person tutor and you can put that extra money into a college savings account!
Reviewed March 2017
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.
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