It may seem like a daunting task, and can be if you don’t plan ahead. Let’s face it, college isn’t cheap and it’s not easy to know far in advance how much you will actually need if you are young and not close to college age, or looking to start saving for your child.
💡Fun Facts:
| 1) The average yearly cost of college in the US is around $34,000 |
| 2) UCLA is the most applied to college in America — 110,000 applications annually |
| 3) About 62% of high school graduates attend college |
The best thing to do is to make a savings plan based upon what you can put away right now. That entails making a budget, covering your bills and expenses and looking at what’s left that can be put aside in an interest bearing account that can grow over time until you need it.
Research Scholarships and Grants
Depending on the subjects of study, or major of choice, you may be eligible for a Federal grant in your college degree pursuit. You may also qualify for a scholarship if your grades and family finances meet the requirements. The more you can research ahead of time, the better you will be prepared when the day arrives to actually pay your tuition. Oftentimes your high school guidance counselor can also be of assistance in helping to point you in the right direction. And don’t forget to do your own research. You have the entire world wide web at your fingertips. Use it wisely!
Student Loan and Parental Loans
This seems to be a four letter word these days! Let’s face it, the cost of education has gone through the proverbial roof and it could seem unattainable for the average working family to pay for. You may need the assistance of a student loan or loans to offset any other source of financing you may have available. Just be sure to do your research and get a legitimate lender who is not going to add hidden and unexpected fees or interest which could add up to an even greater cost in the long run. You can also look into government subsidized loans which will cover the interest fees during the time you are in school. Federal loans are also at a lower interest rate than private loans typically.
If parents have a good credit history and scores, they can opt for a parental student loan to cover some or all of the cost of tuition. Federal Parental Student Loans are also at a lower interest rate, which is set by Congress. If parents qualify for this type of loan, it will require a limited credit check which is not as in depth as private lenders would conduct and would most likely be at a lower interest rate for the term of the loan. It’s advised that students pursue their own borrowing options first, which their parents would not be liable for, before seeking parental assistance in lending for tuition.
529 Plan
You can start saving early by setting up a 529 Account with your bank, which allows you to take advantage of tax-free growth. These accounts are quite popular. As of 2021, there are a reported 14 million 519 accounts with a total of over $400 billion in assets This type is known as the “college savings” option and any investment growth from this account will be tax free as long as it’s used for higher education or any costs associated with it like room and board, fees, and even supplies. Some states will even offer families a tax deduction if they contribute to a 529, so be sure to check if you’re in a qualified state. The other option is a pre-paid tuition plan, which allows families to pay tuition based on the today’s costs. Before making a decision, it’s best to take time and figure out which better fits your needs.
Cosigners
Parents may also opt to cosign their child’s student loan which means the child would be responsible for the payments unless they default on the loan. In that case the lender could seek repayment from the parent, which could cause financial issues and damage their credit. This is advised only if there are no other options available to the student seeking to finance their education.
Choose an Affordable College
It’s true that most kids have high hopes and expectations of attending the school of their dreams to get the education they need to pursue their field of education. Unfortunately, it may not always be possible to attend the best, and therefore most expensive, school offering the curriculum needed to get the degree they require. It’s a good idea to make a list of the colleges which offer your desired curriculum and apply to those which you can reasonably finance. Things could change down the road, but realistically you should pursue what is possible now and see what the future holds later. One method to keep college costs down is to attend a state college, which on average is about 50% than an out-of-state college. It is reported that in-state college costs $25,000 per year while out-of-state collage costs close to $45,000 a year. Another option is to attend two-year community college program for the first half of your collegiate career. Two-year programs often cost around $3,500 per year and can be a great way to reduce ctotal costs.
Keep Added Expenses in Mind
Tuition is not the only expense when it comes to education. If the student is heading to a school away from home, they will need housing, meals, books, supplies and perhaps even a car or vehicle to get around campus and around town if they need to work a part time job. When planning out your financial map for college be sure to make a list of everything you will need so you can get a clear picture of the complete expenses to ensure you have a solid plan to pay for everything.
Photo 1569030 © Ken Cole | Dreamstime.com
OPINION
The cost of college has skyrocketed. Private school tuition in particular has grown at a much faster rate than just about anything else, with some schools costing $50,000 or more a year! This has led to increased enrollment in state schools around the country, but even those costs have risen. It’s important to plan ahead for your children’s future college tuition and costs. College is one of the major expenses you will face in your life, so it’s important to budget, plan ahead and save. Student debt has also become a hot debate issue in America and is often a big burden on new graduates. Don’t forget to take advantage of all available scholarships and grants.
