Can you (or could you) imagine cash flowing college?
I wish I did. Funny thing is, I worked fulltime the entire time I was in college. Using my income to pay for college tuition didn’t even register as a thought.
Analyzing the Cost of each Course
What if you analyzed the cost of each course towards your degree, took 12 credit hours, and you worked either part time (or fulltime) while completing your degree? The money earned while working paid for your courses & you didn’t need to borrow?!? What if you (or your kids) didn’t need FAFSA or other financial aid? Can you imagine what life would be like? I know what you are thinking, it’s NOT possible. But it totally is!
Here’s the total cost of a BS Degree completed in 5 years on a 10 year repayment plan
It takes 120 credit hours for most BS Degrees in 5 years. That 5 year plan would cost (public in-state tuition) $50,580. If you borrow a Federally backed student loan to pay for those courses, you would tally $90,211.69 total due to the principal & interest owed on a 10 year repayment plan. Almost double the cost originally. What if your career only paid you $40k annually? You would end up starting you new career in a BIG hole. Maybe you love your career but you end up resentful because the debt wanes so heavy on your mind (and pocket). Happen to anyone?
Fortunately for me, I used some of my income in college towards the cost of my books & I completed my BS degree with a total of $32k instead of over $50k. Took me over 10 years to pay it off!
What Can I do to Cash Flow College?
Here’s 2 things to use for yourself (or your kids) to cash flow college:
1. 529 Savings Plan. Tax-advantaged savings plan designed to encourage saving for future education costs. There’s 2 types, but the “Education Savings Plans” are the better option. In this savings, you can invest the money to grow tax free through mutual funds or ETFs & the funds can be withdrawn to pay for tuition, room & board, & other fees.
2. Brokerage Account (type of investment acc). There’s 2 types as well, “Full Service” & “Discount” Brokerage accounts. The biggest benefit with this account is there are no limitations on when you can withdraw money and for what purpose you can use it. You don’t have to worry about penalties for early use.
You can totally cash flow college! Plenty of options!