College costs are rising and federal student loan rules are changing. Join us as Cathy Mueller from Mapping Your Future breaks down new loan policies, parent loan caps, and alternative funding strategies to help your family afford education without overwhelming debt. Whether you’re planning for your children or grandchildren, this conversation will give you the clarity and tools you need to make smart financial decisions.

Transcript:

Jeffrey Snyder. Broadcast Retirement Network

Well, Cathy, welcome to the program. It’s great to see you.

Thanks for joining us this morning.

Cathy Mueller, Mapping Your Future

Well, thank you. I’m pleased to be here.

Jeffrey Snyder. Broadcast Retirement Network

And I really appreciate Betsy Mayotte of the Institute of Student Loan Advisors connecting us. Before we kind of get into paying for your future, I want you to tell us a little bit about your organization, Mapping Your Future.

Cathy Mueller, Mapping Your Future

Sure. Mapping Your Future is a public service nonprofit organization, and we provide college, career, financial aid, and financial literacy services. We do that all free for students and parents, and we get our funding through different projects that we work on for different states and other nonprofit organizations.

Jeffrey Snyder. Broadcast Retirement Network

Well, certainly what you do is very important. A lot of people, I think, and I want to maybe my first question to you is given some of the major changes that have happened to federal student loans, have you seen maybe more questions and concerns raised your way in terms of funding children’s future?

Cathy Mueller, Mapping Your Future

Yes, definitely. Because in particular, there were two changes that I think really are having a big impact on families. First of all, the parent loans.

Congress made a change. It was implemented on July 1st of this year, and that change limits the amount that parents can borrow to pay for their child’s education. In the past, they could borrow up to the cost of attendance, which was in some cases a pretty high amount.

Now they’re going to be limited to $20,000 per year per student for a total of $65,000. Now, when you think about that, four times 20 doesn’t add up to $65,000 now.

Jeffrey Snyder. Broadcast Retirement Network

No, not in my math or multiplication tables.

Cathy Mueller, Mapping Your Future

Yeah, so exactly. So I think that that should be an area of concern because you cannot wait until the last year to decide how you’re going to pay for that senior year in particular. If the $20,000 is going to be enough, you’re going to be short in that senior year.

And so it’s really important for students and parents to be thinking ahead about how much they’ll need to pay for their education and where that funding is going to come from. And if parents are going to borrow and planning on borrowing for the child’s education, they’re going to need to know that they can only borrow a total of $65,000. That seems like a lot of money, but it does go pretty quickly when you’re talking about a total cost of attendance, which is tuition and fees, books and supplies.

It can also be special equipment, living expenses like room and board, and it can also be transportation.

Jeffrey Snyder. Broadcast Retirement Network

Yeah. And candidly, I mean, the price of going to a college, whether it’s at the high end of tier one school, or I don’t even know how you just delineate them, but let’s just say, like the super Ivy league school or even a state school. I mean, college costs have certainly gone up at least since I’ve gone.

And that’s like 30 years ago.

Cathy Mueller, Mapping Your Future

Exactly. And other expenses have gone up too. So it costs more to live if you’re going to live in a dorm or if you’re going to live off campus, that is a cost that has increased for students.

Rent has certainly gone up in a lot of areas around the country. And so it just costs more in general to go to college now. And with that in mind, you need to really plan ahead.

Jeffrey Snyder. Broadcast Retirement Network

So let’s talk a little bit about if you don’t mind, let me, let me just follow up by asking. So the max you can borrow is $65,000. Presumably that may not be enough.

So how do you, if you’re a parent or a guardian of a child, how do you, how can you make up that difference? Where can I go? I guess I could go to a bank, but is that really the smartest way for me to fund my child’s future at a college university?

Cathy Mueller, Mapping Your Future

So with regard to parent loans, that may be an option going to a bank because parents may want to look at private institutions, private funding institutions for loans to help cover some of the cost of the education. Some of them are competitive. They may not offer some of the same benefits that you get with a federal loan, but some of those benefits with federal parent loans have been taken away.

And so there may be some competitive options out there. So I think parents should really look at all the options they have and decide really what is the best financial decision for them. I think it’s important for parents to also think about their own financial future.

They don’t want to put their own future at risk and borrow too much money. Now the student can borrow some private loans as well, as long as they have a cosigner. Most students need a cosigner to borrow a private student loan.

So that’s an option as well for a family to consider. The other options are maybe looking at a less expensive institution. And that may be a tough decision for a lot of families because a student may have a certain goal or this is their dream, but that may be a decision that they have to make.

Jeffrey Snyder. Broadcast Retirement Network

Yeah. Just to kind of follow up on that. I mean, we all have our expectations.

I thought I was going to be the CEO of a major corporation. Didn’t really work out that way. So, you know, we all have high expectations.

If you’re a parent though, you know, 18 year old, 17 year old, I mean, they could be married to the school of their choice. How do you psychologically broach that with a child? Because, you know, I could see where people would, a kid would be dug in and say, if I don’t go to that school, I’m not going anywhere.

Right. I mean, I, you know, you know how kids are.

Cathy Mueller, Mapping Your Future

Well, I think I’m not a psychologist, but I do think that it’s important for students to really look at the options because sometimes they can really be set on an institution, but they’ve never seen the campus or they may have a friend that’s going there. They really need to look at that campus, be on that campus. And it’s a good idea for them to kind of spend some time there.

What they think is a good fit when they’re 17 or 18 may not actually be a good fit when they’re 19 years old. And so I think students need to really kind of keep their options open and really look at everything, including the cost of attendance, because that’s going to really impact, is that degree that they’re receiving worth it? Are they going to be able to make the money back in terms of salary for what they spent on tuition?

Jeffrey Snyder. Broadcast Retirement Network

Yeah. I like that. You also, as part of your organization, talk about financial literacy.

Isn’t that part of the, you know, there’s a return on investment that you’re making in yourself, whether your parents are paying for you, you’re getting a loan, however it works, right? You’ve got to be able to get a return on what you’re getting. And that return is in the form of salary, bonus compensation, pleasure, all those kinds of things.

So that really, that’s a big part of this equation. And, you know, if you don’t visit the campus, how would you even know? Like you may be sold, you know, I think about myself at that age, you know, I was really impressed by maybe I like fast cars, but that I didn’t think about how much the car insurance was going to be or how much the gasoline was on, you know, what I had to do in order to have that car.

Right. So I think your perspective is your perspective. And I think as you’re saying is changes over time.

Cathy Mueller, Mapping Your Future

Right. And I think the value of an education isn’t just what you earn in terms of salary. Now, granted, that’s a big factor for a lot of people.

And I think it’s a really important factor to consider, but I know for myself personally, I value my education just because how much it has enabled me to enjoy my life. I enjoy a lot of things that I probably wouldn’t have been aware of. Had I not gone to college.

Jeffrey Snyder. Broadcast Retirement Network

Let me ask you about a community college. I don’t know what they might call it something different today, but community college, is that a good alternative, at least for the first two years? Look, I’ll be, I’ll be honest.

I didn’t know what I wanted to be. I somewhat argue. I probably don’t know what I want to be when, and I’m still not growing up a kid.

You know, you don’t know what you, most people, maybe some people do, but most people don’t. Is that a good stepping stone to go to the local community college and then transfer after your second year?

Cathy Mueller, Mapping Your Future

I think it is a very good option. A lot of community colleges offer fantastic programs for students. It’s not for everyone, but for those who want to take some of their basics at the community college and then transfer to a four year institution to finish off their degree on their specialty.

That’s a good option for some students. Some students really need to get to that campus that where they’re going to spend all four years. And so that may be a factor for some, but I think community college is a way to help reduce the cost.

And it also may be a good transition for some people who may not be ready to move away from their family and go to a four year institution.

Jeffrey Snyder. Broadcast Retirement Network

Let me ask you about, let’s just say I’ve explored, you know, personally I’ve explored college. Maybe it’s not right for me. Where does a trade school like becoming an electrician or an iron worker, where does that fit into the equation here?

Because, you know, you, you know, college isn’t for everyone. Some people don’t want to do that. They have a different focus.

So does that kind of play into the equation here in terms of that decision making process?

Cathy Mueller, Mapping Your Future

So a lot of community colleges actually offer trade programs. They don’t call themselves trade schools, but they do offer trade programs. And I know that one of the states where we work, they actually have what they call technical colleges and they offer a lot of those kinds of trade programs.

So I would caution students to be a little careful about just selecting any school, because there’s a definition of some schools that are called proprietary. Now, some of those are great schools, but they may be also a little more expensive. So again, I think students need to do their research and make sure they understand the cost of the classes and the program that they’re taking and see if there’s other options that are less expensive that are available to them in their community or whatever.

But I know that a lot of community colleges offer trade programs that are fantastic. And also speaking of trade programs, the federal government this past year with that legislation that limited student loans, they did expand Pell grants. And so Pell grants can now be used for workforce, short-term credential and certificate programs.

The great news about that is that a lot of states now are creating programs that are trade programs that offer these kinds of credentials and certificates. And so students have some new options that are going to be available here very soon.

Jeffrey Snyder. Broadcast Retirement Network

This, this is a question from Adalethia, but let me ask you about artificial intelligence, not how it’s shaping the college curricula, but how is it shaping or is it shaping or reshaping how kids select their college and also maybe how they’re trying to find out about financing their college? Does that, does, has that played a role? Has that seeped into your world?

Cathy Mueller, Mapping Your Future

Yes, it has definitely. Because we have students who are preparing college applications using artificial intelligence, scholarship applications as well, even doing their college research and on what one is a good fit using artificial intelligence. So yeah, it’s definitely in our world.

And I think, you know, and then the other question is that a lot of students that are in high school don’t really like artificial intelligence. They may be using it, but they’re also concerned how is it going to impact their future employability in, in the terms of, are there going to be jobs available for them? And so I think there will be jobs available.

It’ll be different than maybe even what it is today. If you’re talking to a high school senior, what they may face in the job market four years from now could be different than those entering the job market today. So with all of that in mind, I think students need to be educated on artificial intelligence.

I, in my opinion, I personally feel like that I want students to keep what makes them human. So when they’re writing their essays for either admissions or scholarship applications, if they’re going to use artificial intelligence, first of all, they want to check with the organization, make sure it’s okay. Cause some of them will throw out an application if it’s used artificial intelligence and you know, there’s detectors out there, how good they are, who knows, but I would encourage them to first check to see if it’s all right, but then also only use it lightly.

Don’t use it for talking about yourself and why this scholarship or college is a good fit for you because people want to hear from your heart. And so you want to make sure that the story is yours and not artificial intelligence.

Jeffrey Snyder. Broadcast Retirement Network

That’s a really good idea. And hopefully people heed that because I agree. There are probably these detectors out there that can tell when a large language model is employed.

Last question for you. Do kids still, kids, do college students still work part-time as, you know, in restaurants in order to pay the bills? So if you’re trying to make it up, you don’t get that full student loan that we were talking about at the beginning of the segment.

Are kids working in the library, waiting tables? I don’t know. Whatever kids do these days in order to pay the bills, are they still doing that to help make up the difference?

Cathy Mueller, Mapping Your Future

Yes. I think probably more kids are working today than ever before. And I think that’s fine.

I mean, I think it’s good that they’re working and getting that work experience while they’re in school. It probably makes them more employable because they understand the workplace environment. Now, having said all that, though, I think there is a limit.

We don’t want students basically working more than they’re going to school. So where it’s impacting their education and their completion of their degree. I think working to make up some of the costs or to pay for your education is a good thing.

I know that current earnings are very helpful because, you know, having a son in college right now and a daughter who just graduated, they used part of their earnings, their part-time earnings to help pay for their education. And then I use part of my current earnings. What that does is it helps reduce reliance on student loans.

It also spreads out the cost because a lot of colleges and universities have tuition payment plans. And so if you can spread out the cost, you can work it into your budget monthly. And that makes it a lot easier to pay that tuition bill.

I will say that some colleges and universities will charge a small fee with that tuition payment plan.

Jeffrey Snyder. Broadcast Retirement Network

Okay. Well, that’s really good advice. You know, I didn’t know if I worked in college, so I didn’t know if people still do that.

Apparently they do. Cathy, we’re going to have to leave it there. Thanks so much for taking more than a few minutes with us.

And we look forward to having you back on the program again very soon.

Cathy Mueller, Mapping Your Future

Thank you.