Figuring out how to pay for your child’s college is an important thing for parents and their children to figure out together. College is even more expensive than it was in the past, and it usually requires you to throw together money from several different sources. Paying for your child’s education may seem even more challenging when you are dealing with unfamiliar systems. Knowing a few key things can help you make the process easier.
Your Own Savings
If you start early enough, you can start saving up some cash to put towards your child’s education. You can allow the funds to grow in the savings account over time, and there will be no restrictions on how you can use the funds if your child decides to pursue another avenue. One way to max out your savings is by using a 529 plan, which will give you some tax advantages. You can also use your home’s equity if you are a homeowner. You can leverage this by using a HELOC to help cover your child’s time in college. This is a great way to fill in any financial gaps between tuition and what your current savings will cover.
Look for Federal Financial Aid
If your student is a citizen of the US, they may qualify for certain federal financial aid, including federal student loans or parent loans. It’s always a good idea to fill out the FAFSA, even if you think your income excludes you from any of these sources of financial aid. It’s free to fill out, and you may be surprised at what you get. Remember that every little bit helps.
If your child does have financial need, they might be able to get subsidized student loans. This simply means the government pays the interest on the loan when your child is in school, as well as a few months after graduation. It’s a good idea for your child to go for as much federal aid as they can get to start with. That’s because many private loans are more expensive in the long run, especially since their repayment terms might not be as good.
Scholarships or Grants
You can use scholarship search tools to find scholarships outside your child’s school. Your child might be able to get scholarships for being active in certain areas in school or even for a hobby or interest they have. Grants may allow your child to receive money toward a certain area of education. Just make sure you don’t pay money to get scholarships or grants because these usually tend to be scams.
Getting a Job During School
Working during school can help your child make some extra money to cover textbooks or activities. Not to mention, job experience is one element of crafting the perfect resume, so anything that can be added helps. Your child could also take some time off school and use that time to build up their savings to pay for the next year. However, the gap between minimum wage and the cost of college has increased exponentially, so entry level jobs will often not cover the entire balance your child will owe. Combine this method with others.
