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The strongest advice I have for parents – and I am a parent who presently has a child in college – is to try to save from the very beginning. When my son was born, we had a financial adviser who helped us project the cost of college so that we would be able to save an adequate amount over time. That is particularly important with the lack of a middle class in our society today. Many parents would like to see their children awarded aid of some sort, but that doesn’t always happen. Outside of tuition, if it’s possible for one parent to work to help pay for tuition or incidentals, that’s important as well. I have a transfer capability online between my account and my son’s to help him manage his expenses (rather than giving him a set amount).
If you have time, start saving. If you don’t have the time, encourage your teen to begin searching for scholarships early. Their GPA can also help with leveraging more merit aid upon acceptance. Finally, compare prices and look for colleges with the best value and the most financial aid. As a last resort you can certainly borrow, but before you incur debt I would exhaust all your other resources.
Plenty! For the past 33 years, I’ve been helping families send their kids to the college of their choice for less than they ever imagined! I’m also the author of, “How To Pay For College Without Going Broke.” Here are just a few tidbits of advice:
Every family should apply for financial aid using the FAFSA even though they think they may not qualify. Many colleges and universities use the information from the FAFSA to award institutional aid as well as federal and state aid. Do this as soon as possible after January 1st of your senior year as soon as you have the previous year’s tax returns completed.
My advice to parents on paying for college would be to start early. If possible you want to start a 529 plan and make monthly contributions. Plan to save enough to cover the full cost. Anything leftover after covering tuition can be used for books, computers etc. If you are past that point be realistic. Don’t take your son or daughter to visit schools you know that you can’t afford to pay for no. This will just break their heart when you have to tell them after they are admitted. Also, help them apply for scholarships. It can be time consuming and they are busy with finishing their senior year, not that parents aren’t busy too. Lastly, consider the Parent PLUS loan to cover the difference after financial aid has been awarded. The biggest thing to remember here is to remember is that if you have to take out loan for $10k in their freshman year, you will have to do it every year afterwards. If you can afford it that’s fine, but many parents to plan ahead and it usually means a heart breaking transfer to a cheaper college later.
SUBMIT A FAFSA. Many parents tell me that they are not eligible for financial aid when they are eligible. Remember: private colleges and universities give much more aid than publics, and the estimated family contribution from the FAFSA has a much higher salary cut off. Especially in this economy? Absolutely apply for financial aid. A college education is expensive, and costs are going up. Figuring out how you will come up with the necessary funds to pay for college requires planning, perseverance, and researching the options. If your family has not saved the total amount you will need for college or does not earn enough to pay for it, you can still attend college–even the college of your choice. That’s what financial aid is all about.
For more information about the FAFSA: http://collegeadventures.net/blog/2009/11/30/colleges-evaluate-financial-aid-applications/
A general rule of thumb is the rule of thirds. One third of college costs should come from current income, one third from savings and one third from financial aid such a s grants, scholarships, work-study and loans.
Save as much as you can even if you have a high school senior. Take advantage of your state’s 529 plan because there can be in-state tax deductions for contributing money to the plan. In general, it is cheaper to save than to borrow. In addition, ask your student’s college if they have a no-fee payment plan which will allow you to pay by the month.
Parents should get themselves ready for financial aid no matter what. they lose aid qualification if not filed on time and they must file tax return ASAP to renew each year.
First of all, bring your son or daughter into the conversation about financing college. Set realistic expectations. Understand that many private colleges may be able to provide need-based or merit-based scholarships and that it is worth it to apply to both public and private schools. Make sure that a “financial safety” is included on the final college list. When the acceptances have arrived, carefully analyze the financial aid packages and compare and contrast the various types of aid offered. Do not take out private loans without carefully considering the terms of repayment.
Many parents wait until April to file their income tax returns. But, information from the tax returns is needed to complete the FAFSA and CSS Profile forms. While you can complete the forms with estimated information, it will delay the process. Colleges also request copies of your tax returns, usually by March. Missing deadlines may mean there’s no more aid at that school.
Smart early planning is always best and can make college much easier to pay for. Beyond financial planning techniques, which can be extremely beneficial for maximizing need based aid, smart academic planning can pay huge dividends. For instance, hiring academic and test prep tutors is usually a very smart investment. Better grades and test scores can result in exponentially more merit aid.
1) Save early!
2) Take advantage of your child applying to colleges that they are overqualified for. These colleges are more likely to offer a lot more merit based aid and scholarships.
3) A lot of merit based aid is based on the SAT/ACT scores so preparing your child the best you can to take these tests would be helpful.
4) You never really pay the sticker price. A college that has a tution cost of $40,000 rarely ever has students pay the whole thing. These colleges are more likely than most to offer a lot of merit based aid.
5) Fill the FAFSA and any other financial forms correctly. A lot of people make errors on the FAFSA especially and this makes their EFC (expected family contribution) go way up. Make sure you find out how to fill it out correctly before you do.
6) Don’t take out more than $8,000 in loans a year. The most anyone should have to pay back after college is $32,000. A good rule of thumb is that the starting salary one gets right out of college should be higher than the total number of loans they have to pay back.
7) Don’t go to that dream school that you would pay any amount of money to go to because there a number of colleges just like it but cheaper
Please attend any financial aid seminars offered at your student’s high school. These are typically very informative, and other audience members will most certainly ask questions that, when answered, will enhance your understanding of the processes and procedures involved in applying for grants, loans, etc.
Look for ways to save when paying. Some schools even offer rewards Visa and Mastercards that help pay for college, then use these cards to pay for gas, groceries, everytime you would normally use a credit card.
Tips for Managing Ballooning College Costs:
1. Graduation in Four Years or Else
Pay attention to a school’s published graduation rate when searching for a good college match. With costs over $50,000 annually at many private institutions, four year graduation must be the plan from the beginning.
The best thing you can do is save, putting away as much as possible for as long as possible. However, with the continuing rise in the cost of higher education even the most diligent savers may come up short and so you should also be sure to do all the paperwork—the government FAFSA forms and the College Board’s Profile are the primary ones—necessary to be considered for financial aid. There is more available than many people think but you cannot be eligible if you do not apply.
Don’t sacrifice your retirement for your student’s college education. Last time I checked, there was not a line item in the Constitution that required a parent to pay for a student’s college education! However, some families have made that a priority, even at the expense of their own financial well-being.
Stay within your means!!! So many times I have heard parents and students say that they deserve to go to the college of their choice because the student has worked so hard. If we all got what we deserved, the world would be a great place to live for everyone. But the reality after graduation is that the bill comes due. If a family is not able to afford the first choice for all four years, maybe the student should look at attending a two-year program and then transferring. From what I have seen over the last fifteen years (with both my children included), not everyone gets done in the past traditional thinking of graduation in four years. Students should still apply to their top choices and then with the family make the decision that is not only right for the student but also the family.
Become familiar with the language of financial aid. These websites will help you understand the significance of COA, EFC and SAR and help you develop a time line for submitting forms. After reviewing the web pages, do not hesitate to speak with Financial Aid Officers at the colleges that most interest your child.
Start planning early, and put some time in “learning the landscape.” Don’t assume that the “pricetag” of a school will end up being what you actually pay. If the whole family visits a college campus, deputize one adult to take a trip over to the financial aid office. Ask lots of questions, take notes, stay in touch with the people who seemed particularly helpful, and have a family conversation about how much college-related debt makes sense, given the particulars of your situation.
Relax and focus on the steps for financial aid, explain loans and financial responsibility to their child, focus first on their retirement and then the college loans, listen to experts in the field, utilize the workbooks available (i.e., Shrinking the Cost of College, Lynn O’Shaughnessy) and look at graduation rates. Yes it is going to be expensive but staying on task and being attentive to the variety of programs available for our kids will help in keeping costs down.
PlentyI For the past 33 years, I’ve been helping families send their kids to the college of their choice for less than they ever imagined! I’m also the author of, “How To Pay For College Without Going Broke.” Here are just a few tidbits of advice:
In our modern economic times it can be difficult for all families, even families well to do, being able to pay for college. Be sure you file you FAFSA on time. While there is a lot of competition, be sure that your child applies for scholarships and grants. Every penny counts. Also, financial aid packages are often negotiable. Take the time to ensure you have maximized your package before writing the check. Additional help in the way of work study, low income loans, and tax deductions can always help.
Financial aid may be available to those who qualify. The information on this site is for informational and research purposes only and is not an assurance of financial aid.
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