It’s no secret that college is expensive. In fact, many colleges now cost over $50,000 a year when you include tuition, room and board, and other expenses. Now, we all want the best for our kids but how exactly can the average person afford to pay over $200,000 for a 4 year degree? The key is to start saving early and know your funding options. Here are 6 smart tips to help you pay for that dream college:
1. Use a 529 Plan
529 Plans are a great way to save for college. The contributions grow tax deferred and withdrawals are tax free if used for education expenses. For New York State residents looking to open a 529 Plan check out New York State’s 529 College Savings Program.
2. Apply for financial aid
Once you have kids attending college, always fill out the Free Application for Student Federal Aid (FAFSA), even if you don’t think you’ll qualify. There are government backed low interest loans that many parents use to defer tuition costs. The deadline for submitting the FAFSA is June 31st but you’ll want to get it in as early as possible to ensure you don’t miss out on any available aid.
3. Seek national grants
Here are some options:
4. Apply to several schools
To increase your chances of getting financial aid, make sure your child applies to several schools. The more schools they are accepted to, the more chances they will have to receive financial aid.
5. Service in exchange for tuition
These organizations offer college money in exchange for a service commitment after graduation:
6. Live at home & go to community college
Don’t rule out living at home and going to a community college for the first 2 years, then transfer to a 4 year college or university for the final 2 years. You’ll save money on tuition and room and board. This is a super smart strategy and one that many more people should consider taking advantage of. The cost of community college is much less than you’d pay at a 4 year college. If you transfer to that 4 year college in year 3 and graduate you’ll still end up with the same degree but for a fraction of the cost.
No doubt college is expensive, however the benefits for your child to attend college are quite compelling.
For more financial planning tips, download my free report: “8 Steps to Organize and Optimize Your Financial Life”. Thanks for reading!