Helpful advice for your students’ parents:  they should be proactive in college funding whether borrowing or saving

When it comes to college funding, it’s never a good idea for the families of your students to sit back and let nature take its course, whether they already are already carrying other student debt or planning for a college student-to-be.

A measure being considered in the U.S. Senate, which amends parts of the 1965 Higher Education Act, may have considerable impact on borrowers, both students and their parents.

The new provisions mandate a transition to income-driven repayment (IDR) plans for parent and student borrowers. ​ Loans made before July 1, 2026, will have different repayment options compared to those with loans made on or after that date.

If they fall into this category, they should take action now to consolidate loans under an IDR plan. Letting the chips fall where they may could end up with them having to pay back the entire loan or go into default. This is not a pretty picture, especially for parents who are also trying to plan for retirement.

Fortunately, the changes – if passed – won’t go into effect until July 2026, which means they will apply for the 2026-27 award year. If they have a federal Parent PLUS loan or Stafford Loan, subsidized or unsubsidized, they should visit studentaid.gov now to learn about options.

Being proactive is important in many aspects of life. For example, it’s easier to prevent a medical problem than to cure it. The same is true in college funding: It’s easier to prevent getting into debt than it is to get out of it.

A good deal of our $1.8 trillion in student debt is the result of not planning ahead far enough. As the saying goes, “If you fail to plan, you plan to fail.” In fact, it’s impossible to overplan.

Whether or not they think their child will eventually be going to college, middle school is not too early to begin the process. They may have been funding a 529 college savings plan, thinking that will cover the bill, but will it really? It’s time to take a cold-eyed look at what college may cost and what they may have to do to minimize debt.

Think about $20,000 to $40,000 per year in tuition, fees and other costs, totaling $80,000 to $160,000 over four years (and with inflation, it may be a lot more). How many years do they have before that first tuition bill is due? What size funding gap will they have to cover, and what can they do now to redirect cash flows and increase contributions to fill that gap faster by the time the child is a junior in high school.

It’s certainly possible they won’t have to foot the whole bill. Colleges hand out free money in the form of grants and scholarships. College students have been known to work to defray their expenses. It’s important for parents and students to work with certified college planners who are knowledgeable about financial aid and how to prepare to pay for college.

There’s a lot more to a solid college plan, and most of it takes place during high school. A student has to identify the right schools and programs for them, in line with their families’ resources. They then have to make themselves an attractive candidate for admission – burnishing their “resumé” with volunteering, extracurricular activities and developing artistic, athletic and other skills and abilities.

As important as those things are, it’s even more important to save intentionally to minimize borrowing. Waiting until last minute means they will be contributing to that $1.8 trillion in student debt.

Brian Safdari, who founded College Planning Experts in 2004, is a Certified College Planning Specialist™. He and his team have assisted more than 7,500 students nationwide on their college journey using their exclusive My College Fit System and financial planning tools. For more information, call 818-201-4847 or visit collegeplanningexperts.com.