Over the last nineteen months, we have seen the steady deterioration of our

country's economy. This has affected our clients through loss of income AND

significantly decreased value of savings. But with a little preparation, this

storm doesn't have to freeze your college plans.

Here's the dilemma. Colleges and universities endowments have decreased at

the same rate as personal savings and investments. State funding for public

colleges has been cut significantly.

Families that saved for children have seen their savings plummet by half

leading many families to "down-size" their college expectations. These

students are now applying to the state (or public) colleges increasing

competition for admissions and yes, competition for financial aid.

Credit worthiness will no longer just be based on a credit score but on

verifiable and secure income as well. We predict that credit worthy based

loans will be difficult to find.

This combination of downward financial pressures is leading us into a

"deadly storm" for financing college. Families need more help, but the

colleges will need to reduce help and increase costs to meet their changing

financial positions. So, in this new era of booming college applications and

dwindling financial aid, what can you do for your student?

First, families need to take stock of their resources and consider not

allowing their student to attend a college they can't afford and not take

on unreasonable college debt. Despite the marketing campaigns of the colleges

and universities to the contrary, employers don't place much emphasis on

where you graduated, just that you graduated with a degree. (Note: the

business leaders that put us in this mess overwhelmingly graduated from

Harvard; draw your own conclusions.)

An education beyond high school is necessary to get a well-paying job. But,

when you choose that institution of higher learning you need to determine how

you will pay for all four years. A combination of free money, savings, and

loans is acceptable as long as the loans can be paid back with the expected

salary.

Second, consider alternate plans to get the same degree. Consider commuting

to a local college or university for a savings of about $7000-$8500 per year.

In addition, investigate spending your first two years at a community

college. For example, Virginia's Community College system has negotiated

guaranteed transfer programs with the four year schools like Virginia Tech,

UVA, JMU, VCU, George Mason, CNU, and others.

This allows you to finish the first two years and have all your credits

transfer. It also means if you meet the GPA and other requirements, you are

accepted by these schools as long as they have space. And the tuition and

fees costs are half or less of the four year universities.

But remember with the booming applications at the four year public schools

the applications to community colleges are expected to increase. This means

that your local community college may not be able to accept all applicants

due to space restrictions.

Third, students will have to work more through school. Paying for their own

pizza and laundry money gives the student a greater stake in their education.

Research has also shown that students who work during college organize

themselves better leading to better grades.

Fourth, really examine your spending habits. Where can you cut to help pay

for college? Can you reduce your insurance costs? Can you eliminate

Starbucks, eat out less, or reduce shopping trips? What can you buy used and

apply the difference to college costs?

The preparation families put in now will make the difference between freezing

in the upcoming storm instead of graduating from college.