It’s amazing to me that I’m already talking with my youngest child about post-high school plans. I can easily remember when our biggest concern was whether he’d be a pirate or football player for Halloween!
The college experience has changed quite a bit since I was attending class—and so has the cost. It’s getting more expensive to give our children a higher education. According to College Board, students in the 2017-18 school year spent an average of $800 more in out-of-state tuition at a four-year public institution than they did the previous year. And, there are no signs these increases will slow down anytime soon.
So how are we supposed to prepare for that tuition bill? The best strategy is to make a plan and start early.
Ask a professional. You’ve heard it before—the sooner you start saving for your child’s education, the better. A trusted financial advisor, like those at Mountain America Credit Union, is invaluable. A short discussion will give the advisor direction on the best course of action for you.
Tools and information. When it gets closer to your child’s college adventure—two or three years before—start doing your research. College Board is a great place to start. This website has a variety of tools and calculators to help you develop a personal cost estimate for the college your student plans to attend. It also has information on financial aid, scholarships and testing prep.
Education financing. Evaluate the final costs, including living expenses. Apply any scholarships your child has received. Hopefully, investments and savings will cover what’s left over. If you find yourself in need of additional funds, you’ll probably have to look into supplementing your savings with a loan. Here are a few options:
- Federal aid These loans are managed by the government and typically have lower interest rates than private loans. Another bonus—if you’re in school, you don’t have to make payments. Get more information at www.fafsa.ed.gov.
- Private education loan If you’ve exhausted your prospects for federal aid, investigate private loans. These loans are available through traditional financial institutions like banks and credit unions. Shop around. Often, credit unions have better rates and terms.
- Line of credit If you’re a homeowner, a home equity line of credit (HELOC) may be an option. This is helpful for those who are attending a trade school or community college as most two-year schools don’t offer federal loans.
Sending your child off to college is bittersweet. Create a plan to cover the tuition bill to make for a smoother sendoff.