Financial Consumer Advocate Professor Rodney Ballance has a plan that can save you a fortune
There is currently $1.2 trillion in student loan debt in this country, with approximately eight million Americans in default. A hot-button topic in the upcoming presidential election is the issue of college student debt and its continuing trend to spiral out of control. Some presidential candidates are making campaign promises to end tuition debt altogether; Hillary Clinton’s “progressive” plan to ease the debt burden on students and their families would cost $350 billion over ten years.
Rodney Ballance, a financial consumer advocate and host of the nationally syndicated radio show “I Control My Money,” cautions that any plan involving grants and other government-funded easements of student debt can be counterproductive. When more money is available, colleges and universities tend to raise tuitions to match.
Ballance points out that, when planning for college, many of today’s popular college planning products have significant drawbacks, and could either leave a student without enough money to complete college, or cause them to graduate with insurmountable debt. Parents who had their children’s college money in a 529 savings plan during the “Great Recession” saw the potential disaster of placing that money in the volatility of the stock market, especially mutual funds.
“Additionally, the FAFSA – free application for federal student aid – report you file must contain every financial product and plan you participate in, and these can substantially diminish the amount of financial aid you might receive,” said Ballance.
Not all is doom and gloom for future students, however. Ballance, author of “The 7 Indisputable Laws of Financial Leadership” and “The Love of Money,” states that there are options available that, if properly pursued, could easily result in a debt-free college graduation. “There are also much better ways to save for college than any plan regulated by the government – like the 529 plan – and some of these do not even have to be listed on the FAFSA, which can result in your student being eligible for more college aid.”
One way Ballance encourages students planning their college paths who wish to leave debt free is to look into a work college. There is a network of colleges that enables students to receive the same degree in the same amount of time, but with the tuition being significantly reduced – if not eliminated – by working for the college at the same time. “My wife graduated from one of these work colleges, and her Bachelor’s degree in Psychology is just as valid as someone who graduated with $200,000 in debt,” he said.
Whether or not a work college is right for a student, Ballance reiterates the message that there are much better ways to save than the much-promoted 529 plan. He points out that some of these alternatives have no penalty if your child for some reason doesn’t attend college, or if the student gets a “full ride.” These alternative plans can even be used to buy a new car, or supplement retirement if not needed for education.
“I once heard someone say that just because you hear something over and over, it doesn’t mean that it’s true; conversely, just because you rarely hear of something, it doesn’t mean it’s wrong,” he said. “My advice is, keep an open mind and don’t just rely on the salespeople pushing mutual funds. You might be pleasantly surprised.”
For other financial advice that everyday people can understand and benefit from, Ballance, who has been ranked #9 at producersweb.com, encourages people to visit his website at www.
financialleadershipacademy.com or www.icontrolmymoney.org. He is the president of the Financial Leadership Academy, which itself is the educational arm of the IFLA – International Financial Leadership Association – of which he is the founder. IFLA is the nation’s leading financial consumer advocacy group. “We’re committed to providing financial literacy to the American public, and being the strongest advocate for them on earth. It’s important for me to help keep control over and access to money in the hands of those that earned it.”