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Dealing With the College Cash Crunch

As the economy struggles to recover, more families are now faced with some critical decisions when it comes to paying for college. Despite the economy, college costs are still on the rise with some elite private schools maxing out at as much as $50,000 per year. Market volatility and along with rising college costs has left many who were once on track with projected shortfalls.

So what can you do if you are the parent of student who is getting close to college age if you haven’t saved enough for college? Here are four strategies to consider:

  1. Consider a lower cost college. I know this is in the ‘duh’ category but you would be surprised at how many people get hung up on one specific college and never look beyond it. To achieve the desired outcome, research colleges to see if there is a public university or a private one that can provide the same training in your students’ area of interest at a lower cost.
  2. Apply for scholarships and grants. There are still a lot of scholarship opportunities out there. There are specific sites like FastWeb.com that can help but there are also companies, organizations, and foundations that sponsor scholarships. So do your homework before you give up on this option. Start early (some you can apply for as early as elementary school). And you can often increase your chances by applying to off-the-beaten-path schools instead of the brand names that everyone chooses. One of my friends sent both of her kids to college on scholarships alone – and they graduated debt free from really good schools and had multiple job offers.
  3. Consider going to a 2-year college. Many students are opting for this and then transferring afterwards to complete their four-year degree. This can dramatically cut your costs.
  4. Know your loans. Start by visiting FAFSA (www.fafsa.ed.gov) to learn about student aid and apply early. Many students and parents are utilizing Stafford loans and Federal Plus loans, and some parents are even using home equity loans (which I don’t recommend) to fund college. Another resource is FinAid.org. However, before signing on the dotted line for any loan be sure you have read and understand all of the fine print and be on the lookout for scams — if it sounds too good to be true, it probably is. If you feel you need more help in this area, check with a financial planner. Look for planners who specialize in this area because there are lots of options and things to consider. ps!

The Wage Gender Gap Could Cost You $2 Million

The financial consequences of Working While Female (WWF) can add up to a lot of  missed opportunities.

For all of us who are guilty of WWF we already know we earn less then men with the same job. Studies show that on average women earn 77 cents for every male dollar, and while that may not sound so bad in and of itself, have you ever wondered what that could add up to over your lifetime?

Well, according to the article “Gender Wage Gap: Are you paid as much as a man if he had your job?” by Evelyn Murph, the president of the WAGE Project and E.J. Graff, a resident scholar at the Brandeis Women’s Studies Research Center, the gender wage gap could cost you big time. Although this information is a couple of years old, I think it bears repeating:

  • If you’re a young woman who graduated last summer from high school, you will earn $700,000 less than the young man standing in line with you to get his diploma over your working life.
  • If you graduated from college, you’ll lose $1.2 million compared to the man getting his degree along with you.
  • If you graduated from law school, medical school, or got an MBA last summer, you’ll lose $2 million over your lifetime.

So you may be asking, why worry about this issue now? And what can you really do about it? It has been this way since the beginning of time. Well, call me the eternal optimist, but I believe that just because something has always existed one way that doesn’t necessarily mean that it has to continue that way. And, until you recognize a problem and it hits home, there isn’t much incentive to fix it. So consider this, the missing money in your paycheck could represent food you can’t buy, credit cards you can’t pay off, lessons your children won’t have, and retirement savings that you will never have the opportunity to enjoy. So this is not just one woman’s problem, it belongs to all of us.
One fix to gain some headway is to be proactive and practice the art of salary negotiation beginning with your first job and every job thereafter. As women, we are sometimes timid about negotiating a salary, but guys do it all the time and that is one of the reasons why they stay ahead of us when it comes to pay.

My question to you: Why do you think the gender wage gap still exists? Here are some explanations that have been given over the years. The gender wage gap exists because:

  1. Women aren’t as well educated as men
  2. Women leave the workforce to have babies
  3.  Women choose low paying jobs
  4. Discrimination

What you think? Do you agree or disagree with the explanations above and what we should do about it? Remember, our actions today will not only affect us, but the generations of women that come after us. No pressure here. ps!

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