A how-to guide on planning for kids’ college costs
Many parents dream of the exciting day when they take their child to college, help decorate their dorm room and hug them goodbye as they begin their journey closer to adulthood. However, this idyllic scene can turn sour depending on how parents choose to approach the financial responsibility that comes along with their children going to college. It’s no secret that college today is expensive. According to College Board over the course of four years, the average in-state, public university costs $37,640 and an in state private university costs $129,640. Without proper planning it can quickly eat into savings regardless of income.
How to save
When saving for a big expense like college, the sooner parents get started the better. One of the top resources parents can use to help fund their children’s college education is a 529 plan. This investment vehicle allows parents to begin saving for college early, offers tax-free earnings growth and is exempt from federal taxes on qualified expenses. The money in this account can be used for a variety of things including tuition, fees, books, supplies and computers.
How to set expectations
It’s also important for parents to include their children in discussions about how their college education will be funded. A good time to start the conversation is when students begin high school. During this time, parents may want to let their children know how much they’re able to contribute to their college education. Setting an expectation of how much financial support students can expect will make it easier for their children to know how much of their college education they’ll have to fund themselves.
To get a better idea of what costs they’ll have to cover during their college years, high schoolers should sit down with their parents and figure out other additional costs that come along with college including textbooks, school supplies, clothes and food.
How to decide public vs private
When discussing college costs, it’s also important to point out the price difference between private and public schools and weigh the pros and cons. In many cases, public universities can provide students with the same curriculum and activities at a lower price tag. In addition, families should also keep in mind the cost difference associated with attending college in state versus out of state.
How to maximize funding
Once a student is accepted and chosen where they will spend their college career, students and parents can research other ways to cut the cost of tuition. There are countless scholarships and grants available, and students should exhaust all avenues for funding through their university and third party organizations. Both parents and student often underestimate the amount of scholarships that may be available to them, especially at private colleges. Prior to applying for a student loan, students should contact their financial aid office to see what financial assistance the school can provide and research grants they may be applicable for.
In addition, prior to starting the school year, students can contact the university and see if there’s any part-time work available for students. These jobs are great because they’re typically flexible when it comes to classes and on-campus activities.
Starting college is a nerve wracking experience for both the student and the parents. But planning ahead on how to tackle the costs associated with higher education can help make the transition to college life easier.