NEW YORK (MainStreet) —As a young mother, Torski Dobson-Arnold faces an all-too-common dilemma: How to save for her son’s college education while she’s still paying off hers.
“I have over $50K in students loans that I’m desperately trying to make a dent in,” says Dobson-Arnold, a career coach and founder of Your Career Confidence based in Mechanicsville, Va. “Yet I am preparing for, and creating the expectations, that my 10-year old son will attend college in less than ten years.”
Dobson-Arnold and her husband are taking a two-pronged approach to the challenge – paying down the debt while also socking away money for their son’s future college tuition and expenses. “As parents, you will either pay on the front end or the back end for your child's education,” Dobson-Arnold says. “It's a little bit more affordable now, so that's what we are doing.”
Plenty of young parents, or those planning on having children in the next several years, face a similar quandary. And when it comes to making the right financial moves, the stakes are certainly high. Based on the College Board’s projections, if the cost of college education increases at an expected 6 % annual rate, when Dobson-Arnold’s son enters a private college in 2021, tuition will be more than $71,000 annually. Parents of even younger children face even heftier bills. A baby born in 2012 faces a projected four-year price tag of $288,000 for a private college and $123,000 at an average public school. Want that soon-to-be-toddler to go Ivy League? Expect to shell out more than $422,000 for that coveted degree.
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So with those daunting projections in mind, is simultaneously saving for college and aggressively paying off college debt the best financial move? Experts say – as with a lot of money-related decisions -- it depends to a degree on individual circumstances. Yet here are some guidelines and tips that can help you reduce student loan debt while also ensuring Junior will be able to attend college.