Saving for College? Five Tips for Parents
There’s no getting away from the fact that college is expensive. The 2012 College Board report “Trends in College Pricing” puts the average annual tuition and fees for out-of-state students attending a public four-year institution at $21,706. By the time additional costs are factored in, that already significant figure reaches $30,911. When that figure is multiplied by four, you're looking at a serious outlay (like $30,000 plus wasn’t serious enough). Parents can reasonably expect to contribute half to two-thirds of the total cost of college, so for all but the very wealthiest of families, it makes sense to think of saving for college as a necessity. Here are five tips to help parents succeed.1. If you’re a parent, especially one with multiple children, you’re likely to be feeling the pressure somewhat. The best thing to do when saving for college is to start early. That newborn will be of college age seemingly in the blink of an eye. Getting prepared early will make it seem like less of a battle.
2. Likewise, parents can take advantage of a Private College 529 Plan; essentially locking in the cost of tuition at today’s prices (they’re steep enough already - imagine what they’ll be when your child is old enough to actually attend college). If your child ends up attending a public or non-member college, the funds can be diverted at a negligible cost.
3. It is reported that millions of dollars worth of financial aid goes unclaimed by students from low to moderate income families. It’s money that you’re entitled to, so don’t leave it on the table. Be sure to submit a free application for Federal Student Aid (FAFSA) every year. If you don’t ask, you don’t get. It doesn’t get any more simple than that.
4. Don’t forget to encourage your child to apply for scholarships. Perhaps more importantly, they shouldn’t be shy about it. It’s simply not enough for a student to apply for just one scholarship, cross their fingers, and hope for the best. The odds of being awarded a scholarship improve the more applications are made. Check out FastWeb - they have details of more than 1000 college scholarships.
5. Grandparents and other relatives can often be a great source of support. At birthdays and Christmas, it’s likely that many will end up buying expensive gifts. Ask them to pare down the gift in favor of contributing to your child’s college saving plan. You’ll probably find that they’ll be only too glad to assist and may even offer regular contributions.
Whatever you do to save for college, it’s best to think of it as a marathon and not a sprint. There’s an old saying that you can only eat an elephant in bite sized chunks. Saving for college can be thought of in much the same way. Committing to saving X amount of dollars each months is way less scary than facing up a $100,000 plus bill.