Each year we are amazed at the lack of planning that some families put into college, especially financing college. The proof of this lack of planning comes out when we ask these simple questions in the initial interview with the student:

Why do you want to go to college?

Where do you want to go to college, and why?

What career (vocation) are you looking at, and why?

The lack of thought process is evident when we get answers from students such as; "I don't know," or "Because that's where my friends are going to school," or "I'll figure that out once I get in school." Simple answers like this not only show a terrible lack of planning but will almost assuredly cost these families a minimum of $10,000 to $20,000.

Why is it so imperative that both students, and their parents, plan far in advance?

With deficits in the billions of dollars, most states have little money to subsidize their state universities. As a result, these state universities' cost is now over $25,000 per year, per student.

Ten years ago, you could pay for college expenses with a few low-cost loans. Today, Stafford (student) loan interest rates are 5.2%, and it's not uncommon today for students to graduate from college with $25,000 to $40,000 of debt.

The college cost is now so high that parents must shell out a considerable chunk of their income and savings, yet they still need to borrow as much as $100,000, or more, for education.

Regardless, the current unemployment rate is under 4%. Many students who graduate today cannot find jobs in their field of expertise and end up waiting tables at a local restaurant or other low-paying occupations.

Today, building a game plan to pay for college is a MUST! Here are just a few things both students and parents should consider when creating that plan:

Student To-Do List

Career Assessment – this could help you avoid the 5-6 year degree due to a mid-stream change in major.

College Selection – rework your choices to 6-8 colleges to create maximum competition among colleges and increase your potential tuition discounts.

ACT/SAT prep – a minimum increase in your scores could boost your chance for merit scholarships.

Campus Visits – conduct face-to-face visits with admissions and financial aid officers, so you know exactly where you stand.

Extracurricular Activities – maximize your resume of achievement.

Grade Transcript and Essay Preparation – have these ready to go for early applications and acceptance.

Parent To-Do List

EFC Planning – estimate your financial aid eligibility to know the dollar amount of scholarships and loans the student can receive.

Loan Planning – understand exactly how much education debt you can incur without jeopardizing your current budget or retirement funding.

Tax Planning – review your 1040 tax schedules to discover potential tax savings that can help to fund college costs.

Cash Flow Planning – review your investments, health costs, insurance costs, mortgage costs, and current living expenses to discover potential areas of cash flow improvement.

Investment Planning – review all your investments to discover the "real rate of return." Many hidden costs can be converted to cash flow and used for college.