Many parents often find themselves struggling to figure out how to realistically plan for paying for their children’s higher education. First and foremost, being honest with yourself – and your children, before applications are submitted – can help everyone understand what the financial expectations and limitations are for such an important financial commitment.
One easy way to save early? When your kids are little, open a 529 savings account if your state has them; it can be an excellent way to put aside money for college expenses. Encourage family members to contribute to your child’s 529, making deposits for birthdays and holidays in lieu of toys or clothes. According to Fidelity, 72% of grandparents feel it’s important for them to save for their grandchildren’s education, so don’t be shy about asking.
It’s important your children know both the cost and importance of an education early. (Collegeboard.com estimates that the 2016-2017 amounts for tuition, fees and room and board averaged $20,090 for public schools and $45,370 for private.) They should understand that they can save the checks they get from friends and family for birthdays and holidays in a college savings account. As soon as they’re old enough to be aware of the cost of things – groceries, a pair of jeans, a new video game – the opportunity is there to be honest with them about your ability and/or willingness to pay for a college education.
When they enter high school, talk to your children about your financial resources and discuss all their options (in-state vs. private; living far from home vs. living at home). List all of the possible expenses college will bring.
If you will need additional money, you can explore the following options:
- There are thousands of scholarships available, ranging from those left-handers to full-ride scholarships based on academic merit. Don’t wait until senior year to start looking for scholarship opportunities. Just like studying for ACTs and SATs, researching scholarships should be a regular activity in your student’s high school years.
- Depending on your income and need, Pell grants and other government grants are an option. Take the time to investigate these, as they are, for the most part, fee free and do not require repayment. There are 101 grants listed here on org.
- There are many companies that will help pay college tuition for either employees or the children of employees. If your child is looking for a part-time job during high school, good companies to work for (with some limitations to choice of schools) include Starbuck’s, McDonald’s, UPS, Ann Taylor, Inc, Staples and many more. Be sure to check with your employer to see if there are any benefits you can use for paying for your child’s college education.
- Financial aid can be a huge help to those who qualify. If you feel unsure about how to go about applying or have a hard time understanding the ins and outs of the application – where one or two errors can throw off the entire process – there are many qualified fee-based advisors who can guide you and make sure everything is done correctly.
- Student loans can make the difference between being able to afford college or not, but they can also be a long-time burden on students and parents alike. Consider carefully if spending the extra money to attend a school that is financially out of reach is worth the years of repayment that will follow graduation day. There are two types of student loans: federal student loans, the option that comes with a FAFSA award, and private student loans, that are available through banks and other financial institutions. If you’re wondering how much that loan, with interest and fees, will actually cost you, check out this student loan calculator before applying for a loan at your local bank.
Paying for college is difficult enough; making sure that every family member understands your particular financial situation will make it a lot easier.