College Savings Tips

GET STARTED EARLY

Planning ahead is everything when it comes to saving money, and that is no different when it Planning is everything when it comes to saving money, and that is no different when it comes to college expenses. Don’t wait until your child is a senior or a junior to start these conversations. Discuss college throughout their childhood. Encourage them to help save and pay for their higher education. They will appreciate it more in the long run if they help pay for it. Traditional college may not be for everyone, but some sort of higher education will be needed to thrive in life, and it doesn’t have to be expensive!

GET COLLEGE CREDIT IN HIGH SCHOOL

Take AP, CLEP, PEP, and IB classes while in high school to earn college credit, even before you enroll in college. These classes will usually substitute for general college credits (not prerequisites) and can help save money and help you graduate faster. Talk to your school counselor to see how to enroll in these classes.

PRIVATE VS STATE SCHOOLS

While we all know that private universities are usually more expensive than state schools, don’t be so fast to dismiss. Financial aid packages and tuition discounts can sometimes make them more affordable than public schools. Be sure to apply for financial aid to see what is available. Then compare the cost of your ideal schools and see what makes more sense for your situation. Also, dozens of colleges have generous “no loans” financial aid policies that often replace loans with grants. Just do your homework!

START AT COMMUNITY OR JUNIOR COLLEGE

Starting at a Community or Junior College can be a great way to get your introductory college courses out of the way for less money while still trying to decide what you want to do. But there is one big caveat to this method … be sure your courses will transfer to the college you eventually want to attend. There is nothing worse than taking two years of credits to find out they will not transfer. Many colleges and universities have partnerships with small community colleges for this very reason. It can be a great way to save money, but don’t let it backfire on you.

APPLY FOR FINANCIAL AID

Be sure to file the Free Application for Federal Student Aid (FAFSA) as soon as possible, on or after the October 1st start date. Students that file the FAFSA during the first three months get twice as many grants (on average) as students filing later. This is free money in the form of a grant that does not have to be paid back.

FOCUS ON FREE MONEY – GRANTS & SCHOLARSHIPS

Now that you have applied for financial aid, it’s time to look at more free money! There is an estimated $46 billion in grants and scholarship money awarded by the US Department of Education and the nation’s colleges and universities each year. Another $1.7 million in private scholarships and fellowships are awarded by organizations and corporations. It is essential to fill out your FAFSA first, as many scholarships require it. Check out websites such as Fastweb.com or Scholarships.com. You can build a profile, and they will automatically send you scholarships for which you are eligible. Don’t stop applying for scholarships even after you start college. The more, the better!

LIVE LIKE A STUDENT

Talk to your kids about living like a student while in school, so they don’t have to live like one after graduating. This is their first time on their own, but maybe there is still a leash to mom and dad. Hopefully, they have grown up budgeting, and now it is just budgeting a few more expenses. If not, give them a lesson and explain its importance. Have them buy used books and sell them back at the end of the semester. Avoid eating out all the time … Ramen is your friend (at least for a few years). Taking out excessive student loans to pay for a lavish lifestyle in college will come back to bite them later.

MAKE A PLAN

This can be a bit tricky but give it your best shot. Try to create a path from matriculation to graduation. I know, easier said than done. It’s hard to plan out classes when you are still trying to figure out what you want to do. However, if you don’t do this, you can get caught in the Great College Trap … changing majors every semester. Constantly changing majors will add time to your degree plan, not to mention thousands of dollars. This is also good advice if you know your program of study. Look at prerequisite requirements and the frequency of classes. This can help you stay on track to graduate on time.

TAKE A FULL LOAD

Many colleges consider students taking 12 credits a semester to be enrolled full-time; however, you will never graduate in 4 years at that rate. You will need at least 15-18 credit hours a semester to stay on track. If you are working full-time while trying to get your degree, that is one thing; but if you have just come out of high school and have grants, scholarships, and mom & dad to help you pay for school, don’t waste time. Take as many credit hours as you can and still maintain your GPA, but don’t overdo it.

WORK PART-TIME DURING SCHOOL & FULL-TIME SUMMERS

Not only does working part-time give you extra money, but future employers love to see this on resumes. If you can, keep your hours to no more than 12 hours a week while in school. Anything over that could jeopardize your GPA. We understand that some students don’t have a choice about working while in school. Consider taking fewer courses if you need to work full-time. It will add time to your degree, but you will not burn out. And for those taking the summers off from school, bump those hours up to full-time to make some extra cash.

TAX CREDITS

Be sure to claim tax credits for tuition and textbooks on your tax return. The American Opportunity Tax Credit provides tax credits up to $2500 on your federal income tax return, and this will be based on what you spent on tuition and textbooks. There is also a deduction of up to $2500 in interest paid on federal and private student loans. These credits and deductions will only apply to those families that meet the income requirements and can possibly change at any time, so be sure to talk to your CPA.

APPEAL FOR MORE FINANCIAL AID,
IF YOUR FAMILY IS AFFECTED BY SPECIAL CIRCUMSTANCES

Special circumstances include anything that has changed since the base year (the prior year) and anything that distinguishes your family’s financial situation from a typical family. If something affects your ability to pay for college, ask the college for a professional judgment review. Many things can qualify as special circumstances. Here are a few … job loss, salary reductions, unreimbursed medical expenses, special needs childcare costs or elderly parent care, and even one-time events. You will just need to provide the college with documentation of the special circumstances and their financial impact on the family.