Quality education is one of the most expensive things you’ll buy for your children. Statistics indicate that more than 44 million Americans hold together about $1.5 trillion in student debt! One in every four adults is paying off student loans. At the time of graduation, a survey showed that the average loan per student borrower was at $37,172, an increase of $20,000 today from 13 years ago.
You want to give your child the best education, but are there ways to make this easier and more affordable? Yes!
Interestingly, the rate of graduation in American colleges has dropped; on the flip side, dropout rates have increased. The main cause for this appears to be lack of proper funding in the education system. Parents find it extremely difficult to afford tuition fees, according to a recent study by UNICEF.
It is said that when you don’t plan, you are actually planning to fail. And with something so costly as college, why in the world would you jump in without a good plan? I’ve got lots of options to share with you, so you can better prepare for your child’s college education,
And I just want to throw this out there before beginning: before you shell out any money, ask yourself seriously if your child even needs to go to college. The world and the economy are vastly different now, and a 4-year-degree is no longer the end-all-and-be-all. College education is not always crucial to future success.
And now the tips!
Start Early, Start Small
Saving requires a lot of financial discipline. Many people fail to save adequately for the education of their child and come up short not taking them through college. The key is to squeeze college savings into your budget early on, so it becomes a habit.
In your family monthly budget, allocate an amount that will go towards college savings. Estimate what the cost of college tuition will be, taking into consideration the inflation rate. Commit to making regular savings, and take advantage of compound interest. You can also consider using investment vehicles like stock funds or mutual funds to help you grow your savings. There are also state managed college savings plans. With these plans, you will get the opportunity to earn stock-market returns on the savings for college education. The advantage of using these is that you are able to make contributions as you can afford them, with the only limit being on the contribution period.
Pre-paid tuition plans are also another way that parents save for their child’s college education. This is another type of state plan where the state takes much of the risk, but with major limitations on how the funds can be used.
And there are ESA’s and education IRA’s. An ESA lets you put away $2,000 (after taxes) per year, per child. And it will grow tax-free!
And even after saving, if you find yourself in the position of needing more for a certain degree or institution, the good news is help is available:
Grants and Scholarships
There are scholarships available out there for pretty much everything under the sun, so spend your teen’s junior and senior high school years researching and applying. Start with the FAFSA and work from there. Check into community opportunities by Googling “scholarships for your state name residents.” You can also visit the websites of colleges you’re interested in; they usually have a page dedicated solely to the scholarships that your child can apply for. Sites like Chegg and Scholly are also super helpful places to start.
Choose a Local School
Start with community college for the first 2 years. Your grad can live at home and save thousands on university room and board fees. Most big universities require the same core classes you can complete locally, whatever your degree goals are.
Also check into trade schools and vocational schools, for targeted job training at a fraction of the cost.
Rent or Buy Secondhand
In the rush to jump into college life, students often get taken in by ridiculously high textbook prices. Waiting until the first day of class to find out you need a science book that costs $100 is a shocker, but with no time to spare, your college bookstore may seem like the only answer.
Plan ahead and find out exactly what you’ll need for coursework. If necessary, speak directly with the professor. Then you can shop before the first term for used books online, at a fraction of the cost.
Start in High School
Students can take courses while still in high school, and earn college credits. In my locality, many of these courses are completely free! It’s also possible to take online classes for college credit, without ever setting foot in a brick-and-mortar building.
When it comes to affording college these days, you’ve got to think outside the box, and plan years ahead!