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What 15 Financial Experts Want You to Know About College Expenses

Posted on Monday August 15, 2011 by Staff Writers

There’s no shortage of information about college expenses: scholarships, loans, savings plans, the rising cost of college tuition, and more. Nearly everyone has advice for saving on or somehow managing to make college expenses work. But what do the experts have to say? We’ve found sound college advice from some of the top financial experts today, whether you’re wondering about 529s or raiding your retirement fund for college. Read on to find out what the experts know about saving and paying for college.

  1. Jean Chatzky

    Financial journalist Jean Chatzky shares her money knowledge primarily as the financial editor for the Today Show, in addition to her books and appearances on the likes of the Oprah Winfrey Show and more. In a Q&A with MotherTalkers, Jean offered her view on the cost of raising a child in a recession generation. She noted that college education costs have gone up three times the rate of inflation. Chatzky questioned the idea of borrowing an entire college degree’s worth of student loans, instead preferring to ask if "the cost of this education and the job I anticipate is worth it." She also strategized that you should "only borrow what you will make in your first year out of college," and even consider going to a community college for two years to help keep costs down.

  2. Dave Ramsey

    Radio show host Dave Ramsey is a household name for many families working on their debt. With features on 60 Minutes, CBS, The Early Show, and even his own show, he’s given plenty of personal finance advice to Americans. In an article on his own website, Dave detailed his advice for building a college savings plan. He recommends staying away from the Gerber Grow-Up plan, savings bonds, and prepaid tuition. Rather, he encourages readers to save using an Education Savings Account, citing the history of the stock market to project that "you can expect average annual growth of 12%." Ramsey also encourages 529 plans, but cautions to choose wisely, reminding readers that some will "perform no better than bonds or pre-paid tuition." Of course, he also supports scholarship hunting, even for very small awards.

  3. Brian Fricke

    Brian Fricke is "America’s Worry Free Retirement Expert," found on Fox Business, Orlando Business Journal, Wealth Manager, and more. So what does retirement have to do with college expenses? For parents, quite a bit. Fricke cautions parents against paying for kids’ or even grandkids’ college education. In fact, he has an Internet-based TV show entitled "Don’t Pay For Your Kids (or Grandkids) College Education!" His reasoning is that he believes kids should have "some ‘skin in the game’" a vested interest." He reasons, if kids have to pay for all or part of their college education, they will likely learn to appreciate and value that education more than if they had no financial investment in it.

  4. Mark Kantrowitz

    Mark Kantrowitz, publisher of college financial aid sites FastWeb.com and FinAid.org, reports that rising college costs may be cutting out the middle class. He worries that students today will still be paying their student loans in 20 years, meaning, "they could still be paying back their own student loans, when their children are in college." Middle class families are often caught in a tight spot, where "they’re too wealthy to get student aid, yet too poor to afford college," so watch out and plan ahead if you’re in this awkward financial position.

  5. Suze Orman

    Suze Orman is a financial household name in America, with her program, The Suze Orman Show, as one of the highest rated on CNBC. She’s also written nine New York Times bestsellers, and won several awards and honors. On Oprah.com, Suze tells parents that saving for college begins with a few simple actions. Even if you’re starting your college savings plan late, you do eventually need to start. For those late in the game, Suze recommends investing money conservatively with high-yield money market funds, CDs, EE bonds, and treasury notes. In addition to their conservative earnings, these investments are easy and can be opened at your local bank, making it convenient to start saving no matter how late you are. In addition to starting savings, Suze encourages actively seeking out financial aid.

  6. Justin Draeger

    Easy college money may be a scam, warns Justin Draeger, spokesman for the National Association of Student Financial Aid Administrators (NASFAA). Advance fee scams that ask for a processing or service fee to help you get private or federal loans are a bust as real lenders will roll origination fees into disbursed funds. You should also be careful about receiving loan solicitations: Draeger warns that "if parents do receive a loan solicitation that sounds too good to pass up, call the university’s financial aid office to make sure it’s legitimate." You should also be on the alert for typos, missing contact information, and overall, offers that sound too good to be true.

  7. Dayana Yochim

    Dayana Yochim is the consumer finance expert of The Motley Fool a rich investment community reaching millions each month. Yochim has also appeared on several shows, including The Today Show, Fox News, and CNN. On Chegg.com, Dayana shared financial advice for both parents and students, encouraging them to take a look at large expenses first, with tuition, room and board, and textbooks making up the biggest expenses for students. She recommends that students rent their textbooks instead of buying them, and instead of spending the money saved, investing it. By her calculations, you could have $70K saved by retirement just by investing college textbook savings.

  8. Farnoosh Torabi

    Author of Psych Yourself Rich and contributor to several media outlets, including Yahoo! Finance, MoneyWatch.com, and the Nate Berkus Show, Farnoosh Torabi is no stranger to sharing financial advice. Farnoosh believes that "the smartest and best ways to pay for college begins with applying for free money," encouraging families to seek out the millions of dollars that are available in scholarships and grants each year as a primary destination, with federal student loans following shortly thereafter. Farnoosh encourages those applying for scholarships to not "underestimate your ability to qualify," noting that there’s something out there for nearly everyone.

  9. Ramit Sethi

    Author of the New York Times bestseller I Will Teach You To Be Rich, Ramit Sethi has a lot of say about not only saving money, but putting it to work for you. Ramit wants you to know that "almost nobody pays the full sticker price" for college, between scholarships and grants from schools, especially the most expensive ones. He encourages students not to shy away from expensive schools like Harvard, because, if accepted, they are more likely to take care of you financially than struggling public schools. In fact, he points out that more than 30 of the most expensive private colleges have no-loan policies, meaning "if you get accepted and you meet their income requirements, they pledge to meet your needs with grants and work-study instead of student loans."

  10. Walter Updegrave

    The senior editor at Money Magazine and author of "We’re Not in Kansas Anymore" wants you to know that "there are no scholarships for your retirement." Given the choice between raiding a retirement fund and hoping to pull through with scholarships and loans, Updegrave strongly recommends going with scholarships. He advises that even with no college savings to speak of, saving for retirement should be a top priority. You can cobble together scholarships, loans, and work study programs to make college expenses work, but it’s significantly harder to finance a retirement.

  11. Manisha Thakor

    Manisha Thakor is an advocate for women’s financial literacy, with appearances in and on The New York Times, BusinessWeek, CNN, Forbes, and The Huffington Post. She offers advice for those who have just graduated college. First to "learn to live within your means right out of the gate," and understanding that your lifestyle may not be the same as it was under your mom and dad’s roof. Second, to "bow down and respect the incredible power of compounding," using the time that’s on your side right now to build savings, even if it’s difficult to put money away. Finally, Thakor recommends to "be an advocate for your own financial security," meaning you have to push for a great salary and be an active participant in your personal finances.

  12. Stacey Tisdale

    Stacey Tisdale of CBS MarketWatch shares a hard truth about college expenses: nearly everyone wants to send their child to college, but it’s not cheap, and you have to plan early. She encourages parents to start as soon as possible, noting that "the No. 1 mistake parents make is waiting too long to get started." With a good investment plan, she says, interest will accomplish most of your savings for you. With young children, Stacey believes investments should be in the stock market, but after that point, should be gradually moved to "safe havens" like CDs, money-market accounts, and Treasury bonds and completely safe by the time your child is 17 and almost ready to draw on that savings.

  13. JD Roth

    JD Roth, author of Get Rich Slowly, named most inspiring money blog by Money Magazine, and one of Time‘s Best Blogs of 2011, wants you to understand the value of a college education. He shares that although, like him, you may do almost nothing with your college degree, it’s worth the money and years spent. He points out that "over a life-time, a college degree is generally worth almost a million dollars." But in addition to increased lifetime earnings, college degree holders have other benefits, including longer life spans, greater stability and security, more self confidence, and even greater job satisfaction. Although many are quick to question the value of a college degree these days, Roth seems to believe that it’s worth the expense and effort.

  14. Robert Kiyosaki

    Unlike JD Roth, Robert Kiyosaki, author of Rich Dad, Poor Dad does not believe college expenses are worth it. Although he did go to college, he doesn’t think it prepared him for what he really needed to do in order to earn his wealth as a good entrepreneur or investor. Instead, college prepared him to be a good employee. For those considering college, Kiyosaki encourages you to "educate yourself on the cost of that education — and the expected return." He believes that there are other forms of education that might provide a better return, so it’s important to educate yourself on what is available beyond a college education.

  15. Laura Rowley

    Money and Happiness author Laura Rowley encourages parents and students to rethink college savings and expenses, with different strategies for different ages of children. Fewer students are finding jobs upon graduation, and college savings plans are dropping, while at the same time, tuition costs are soaring and institutions are dropping grants. She recommends that parents with young children get started right away, although she says that "nine in 10 parents of children under 18 say it’s likely their children will pursue higher education, but only four in 10 are saving." Middle schoolers can volunteer with AmeriCorps to receive service education awards, while high schoolers can rack up college credit hours over the summer by attending community college. Laura Rowley wants college students to be careful not to forget tax benefits for higher education, with the American Opportunity Credit, Hope Credit, and Lifetime Learning Credit all available to college students.