Helpful College Financial Planning Tips
It may very well be the last thing that is discussed when planning for college, but financial planning is serious business. Secondary education can be expensive, and without proper planning some families are left struggling to find the money.
College today can cost up to $40,000 per year, for tuition and housing alone. By planning early and saving often, you can ensure that your child gets the best education possible.
Here are some quick tips to get you started.
1. Saving: Of course the easiest way to pay for college is to save the money. Unfortunately, for many families, saving enough simply isn’t possible.
You should still save whatever money you can. Parents can contribute to their own education fund, and a student can save their money throughout their high school years. Instead of expensive cell phone plans, consider putting that same money into a monthly savings account.
2. Scholarships: The next route to consider is scholarships. This money doesn’t need to be paid back, and can be a big help in paying for college. Scholarships are available from businesses, colleges and high schools, individuals, religious groups, and more. There are both merit based and need-based scholarship programs.
A student should apply to as many scholarship programs as they can. There are online search services that can help. You can find other scholarship programs through your school; high school counsellors can be a big help in this area.The application process for scholarships is sometimes as complicated as the college application itself. The earlier you start with this, the more chance you have at success.
3. Work-Study Programs: Another option is a work study program. This government run program pays colleges to employ students in part time jobs, in exchange for tuition and housing. This program is largely needs based, and works on a first come first serve basis.
4. Tax Benefits: There are certain tax benefits for parents (and students) paying for college. The Hope Scholarship Credit and the Lifetime Earning Credit are both prime examples. Consider having your taxes done by a certified accountant for the college years. They know how to find the deductions, and if paying for the first year saves you $2,000 in income tax, then that money can be used towards the next year. There are also benefits for interest earned on accounts used to pay for college.
5. Student Jobs: One way many students end up paying for college is through work. A part time job after school is another way to pay for college.
6. Financial Aid: Probably the most common way to pay for a college education is through financial aid. Each college will have their own programs, but they all require the FAFSA. This is where you should start. Again it is a first come, first serve basis. Financial aid packages usually come as a combination of loans and grants, and they are based on the family’s needs. Most colleges require the financial aid application along with your college application.
Don’t automatically write off a better college because of its cost. Save early, and work to find scholarships. By doing so you are getting the right start. You should consider a college education an investment, thus do what it takes to get one.
Top Test Prep helps students and parents make informed decisions before and after their admission.
This article on college financial planning tips was written by education expert, Ross Blankenship.