Do you know how expensive college costs will be? Do you know how much you will need to pay? When will the costs begin?
Before considering the cost of a particular college, determine which schools best match the student’s academic and professional goals. Then, once you’ve narrowed the focus, consider the cost of attending each school that fits those parameters. A good place to start is using a tool like the College Board’s search engine to find colleges. If you’re a parent or grandparent planning for a child’s or grandchild’s future education and they are relatively young, it may be challenging to pinpoint goals so far in advance, but you can have high and low price targets for a starting point.
A private college is typically more expensive than a state school; however, private colleges can often make the cost of college more affordable by offering their own grants, scholarships, or deferred loan programs. Surprisingly, even some parents earning six-figure salaries discover that they qualify for assistance because schools use an aid formula that goes beyond income to include assets, liabilities, and special circumstances. Families with older siblings in college, for example, or heavy debts due to medical bills or job loss, may receive help with tuition even though their salaries appear to be substantial. To keep costs low, many students choose to start at a community college and transfer to a four-year college or university.
For resources and information about Federal Student Aid, including age-based preparation checklists, see the checklists on their website.
For assistance in determining financial aid that may be available to help you or your child attend a particular school, go to bigfuture.collegeboard.org/pay-for-college. This simple map will help you walk through the process of selecting and funding a college education, and you can create a custom plan.
The U.S. Dept. of Education also has many resources that can help with planning and understanding options.
A challenge for many families is competing financial goals. It may be saving for retirement, paying for pre-college education expenses, or buying a home. To save consistently for multiple goals, you will want to be disciplined in budgeting and spending. The earlier you start with any of these objectives, the greater the odds that you will succeed.
College expenses may be one of the largest expenditures in a parent’s life. The key to success is developing a savings plan as far ahead of that first tuition check as possible and maintaining the priority of this goal over the many other financial goals that will compete for savings dollars.
One last point we can’t emphasize enough is establishing and maintaining an emergency savings account – in addition to your other savings goals. This account should cover the unexpected expenses that will hit your budget over the many years you are hopefully saving. If you have an adequate emergency fund, you will not have to stop or lower your monthly contributions to your long-term goals because you’ll already have money set aside for the unexpected.
Approaching college funding can feel overwhelming. You have an immense amount of information available to educate yourself on the topic, which can lead to more confusion and questions. A great resource option is discussing the ins and outs with an MSA Money Coach who specializes in and is credentialed in college funding. Plus, our coaching team has an average of 20+ years of experience helping people make smart, practical decisions for a better financial future. One MSA member said, “[Our Money Coach] gave us more information on college savings and purchasing property. Our organization, direction, and confidence have improved around money planning, and we are in a much better financial position since working with MSA.” So what are you waiting for? Call today to get started.
My Secure Advantage, Inc. or any of its representatives do not endorse any of the websites or company names listed here.
This testimonial was provided by a member of MSA. They did not receive compensation of any kind for their statement.
Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal or accounting advice. We recommend that you consult an attorney, tax advisor or accountant regarding your unique circumstances.
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