Time sure flies when it comes to raising kids. Before you know it, they start thinking about life after high-school and what their next chapter will hold for them. For many young adults, this includes furthering their education at a four-year university. This exciting time might produce anxiety for families who worry about how to pay for college. No parent wants to leave their child strapped with a mountain of debt, nor do students want to funnel away their family’s hard-earned savings.
Here are eight simple tips on how to relieve some of the anxiety around paying for college:
1) It’s never too early to start saving – A 529 College Savings Plan is a great way to start building up your child’s college savings account. The earlier you start and save, the more money you’ll set aside for college.
2) Normalize the conversation about college at an early age –It’s a good idea to have realistic and frequent conversations with your child about college and the expenses and costs associated around that experience. It’s important for kids to learn that attaining a four-year degree comes with a financial responsibility. Frequent communication ensures everyone is on the same page.
3) Start exploring options sooner than later – Help your child develop a basic understanding of how student loans, financial aid, scholarships, and college savings accounts are available to help pay for your child’s college tuition and living expenses. This may help reduce stress and motivate your child to achieve their goals.
4) Look at both private and state universities – There’s a misconception that private colleges are too expensive. Many families may not realize that private colleges are in a position to offer more discounted tuition, grants, or scholarships. Your child deserves opportunities, and it’s a good idea to investigate both state and private colleges that suit your child’s interests.
5) Be realistic about your out-of-pocket contributions– It’s stressful to find yourself stretched beyond your financial means for any situation, and helping to pay for college is no exception. This is a good time to meet with a financial advisor to look at your overall financial situation so you can make wise financial decisions regarding your child’s college education.
6) Fill out financial aid and scholarship forms– Even if you don’t think you’ll qualify for need-based aid, it’s a good idea to fill out the financial aid forms when applying to schools. Think of it as a form of insurance against sudden illness, layoff, etc. which can radically change a family’s situational needs.
7) Student loans – Your child should have some “skin in the game” when it comes to paying for their college education. Applying for federal loans at a low interest rate will not only keep their payments down but will also make them appreciate what it takes to earn a college degree.
8) Be committed to repaying student loans on time – Having your child stay current in their loan repayment will help with their credit score. Many loans offer a six-month grace period before you’re required to start paying back the loan. Make repayment a priority and have your child enroll in an autopay program to ensure they won’t miss a monthly payment.
Helping your child finance their college education doesn’t have to be a daunting task that reduces your life savings to nothing. With early planning, a little investigative work, and advice from experts in the field of college loan programs, you and your child will feel in charge of important financial decisions. If you’re looking for other ways to help fund your child’s college education, you can always speak to a First Security Bank Personal Banker. Click here to get started. Member FDIC, Equal Housing Lender.