Loans, Savings, Current Income, maybe Grants/Scholarships, or maybe financial need based self help in the form of federal loans/work study.
There are many choices, college coaching can help you understand not only the terminology but also best practices so you can make the best choices.
Eliminate the “Hidden Costs” No One Tells You About.
But first, let’s examine what most people look at when speaking of opportunity cost while attending college.
Traditional thinking on opportunity costs of going to college looks at the break even point comparing the time it takes post graduation to recover income lost while going to college in addition to the total cost.
Two other consideration are how levels of education compare with the likelihood of employment and contributions to society.
“Education Pays 2013 The Benefits of Higher Education for the Individuals and Society” – College Board Study November, 2013
The report concludes that Individuals with higher levels of education earn more and are more likely than others to be employed.
The report cites different break even points even using average student debt/repayment as a factor. The evidence is conclusive that the pursuit of higher education beyond high school eliminates the opportunity cost of potential income lost while in college.
Most examples using various assumptions indicates a break even between age 32 and 37.
This is true not only during a person’s lifetime but also their contributions to society are greater than a high school graduate without any secondary education.
As secondary education degrees advanced both income and contributions to society also increase (ie. bachelors degree compared to masters degree, etc.).
We Consider Opportunity Cost Decisions As a More Important Consideration
Wealth transfer is money you transfer away unknowingly and/or unnecessarily.
Opportunity costs represent lost interest on the money you no longer control and what you lose/gain when you make a choice between “A” or “B”, or one choice where multiple choices exists.
Wealth Transfers + Lost Opportunity Costs both rob your potential retirement savings.
Let’s look at an example.
$10,000 College “out of pocket costs” 5 years = $50,000 Total 6% Daily Interest for 20 years
Wealth Transfer + Opportunity Costs = $165,989
We can agree College can be a major wealth transfer that also reduces retirement.
Proper college planning can help you eliminate this oftentimes overlooked problem.