How important is it to reduce your Expected Family Contribution (EFC)? What if you already…
Written by: Guest Contributor
College is a big expense, and saving for it can be stressful for both parents and students. It’s easy to make mistakes in this process of saving and paying for an education. We all know about filling out the FAFSA. But let’s talk about 7 unique strategies for saving and paying for college.
Deposit funds into a college savings account
There are various types of college savings accounts available to you. Some schools allow parents to pre-pay tuition, ensuring current tuition rates, rather than the inflated price it will surely grow to in the next several years. You could also use a Section 529 Education Savings Plan to save and compound funds over time. The trick is to start saving as early on as possible to get the most out of these options.
Encourage scholarship applications
Scholarships may not be unconventional, but they are still underutilized. Search around for opportunities that match your child’s interests and talents. In addition to scholarships from a potential school, look for third-party scholarships. Bold and Wisegeek, for example, list plenty of private scholarships that are easy to qualify and apply for.
Maximize your financial aid eligibility
You knew to apply for grants and other financial aid through FAFSA, but there are likely tactics to increase your eligibility that you weren’t aware of. For instance, student aid is determined, in part, by your Expected Family Contribution. By reducing this number, you may qualify for additional aid.
Keep in mind, a student’s finances have more bearing than the parents’ on the level of need assessed by FAFSA. So save as much money and assets under the parents’ names as possible—as opposed to the child’s name.
Appeal your award
Many people forget that you can approach a school’s financial aid office to appeal your award package. By the time a semester is starting, the tax info they used to make their decisions is two years old. There have likely been some changes to your financial situation in that time, and they need to know about these in order to offer you the best support possible.
If you’re deciding between a handful of competing schools, you can also use that as leverage. Have your child explain that they’d like to attend this school, but have a better financial aid offer from another one. Competition is a great motivation for them to do whatever it takes to get your child to attend their school.
Sacrifice some pricey extras
There are a variety of ways to cut back on expenses to save more toward your child’s education. You could hold off on getting them a car, and teach them how to use public transportation instead. Try taking virtual college tours instead of flying across the country to visit schools. Limit eating out, and choose modestly-priced extracurricular activities.
Send your child to an affordable school
Colleges vary widely in price, so be thorough as you compare your options. You could send your child to a less expensive 2-year community college first, and then they can transfer to the 4-year university they’ve had their eye on. Or look into the Freshman Year for Free program, which allows students to essentially take a course for free, and then take an exam to get transferable college credits for that class.
Your final school choice is important, too. State schools are generally more affordable than private or Ivy League schools. But sometimes an elite school might be willing to offer more financial aid (especially for a student with impressive grades or talent). Calculate the net price (or typical out-of-pocket costs) of the schools on your list to accurately compare them to one another.
Share the responsibility
Paying your child’s tuition is one way to ensure they’ll finish college. However, if they’re not pulling any of the financial weight, they may not be as invested in their education. Sometimes having to work to pay their own way is an incredible incentive to make the most of their academic experience.
Weigh the pros and cons of paying your child’s tuition versus allowing them to work their way through school. Perhaps you can make an arrangement to support them financially only as long they keep their grades up. Or you can reach a compromise about who should pay for what and under what circumstances.
Paying for college can feel like a big burden. Ease the stress of this expense by making a thorough plan as early as you can. Use these 7 strategies to support your child’s educational journey in the way that’s best for them.