Paying for CollegeFinancial
Several years ago, our oldest daughter was about to graduate from high school and had begun the college search process.
Initially, she wanted to go to a very expensive school in the Northeast. We supported her desire and reminded her that we were prepared to pay half the cost of going to a state school and she would have to make up the rest through scholarships and/or personal savings.
My daughter said, "Why can't you just pay for it or take out loans like everybody else?"
I had to restrain my wife from choking her. After finally convincing Carol that strangling our daughter would not be the best example to set as pastors, we were faced with helping her make a tough decision,
You may be facing the college decision now or anticipating this decision in a few years, so I thought I would share Six Key Things we learned during this process.
1. Begin saving for college today.
Look into a college savings plan and invest in mutual funds that are allocated age appropriately.
Don't panic that your child is getting close to college.
Just start saving today and do the best you can.
2. Do college planning and selection early.
Start the college search during their junior year of high school.
Help your student focus on getting good grades and preparing for college entry exams.
Visit schools and try to narrow choices down to four or five schools. Apply to each of the schools as early as possible during senior year.
3. Create a budget with your student.
Be clear about what you can and cannot contribute to help fund your child's college education.
Caution students to avoid credit cards altogether. They will have plenty of opportunities to build credit later.
4. Don't feel pressured to fund the whole thing.
Give your child some responsibility. It is important that students have some "skin in the game."
Require them to fund part of their education through working and scholarships.
Have them save money they received as graduation gifts for their college education.
5. Minimize the amount of student loans.
I meet with a lot of parents who are struggling to repay their own student loans while stressing over taking out loans for their child's education.
Consider ways to reduce college cost. Is attending a state school a better option?
Can they take classes at a local junior college and transfer later to a four year college or stay at home while attending a local college?
Think creatively about college funding. Set a goal to complete college with a degree in hand and minimal loans, if any, to repay.
6. Don't sacrifice your retirement savings.
Saving for your own retirement is more important than saving for college.
This is hard for most of us parents, but our children will have more sources of money for college than we will have for our golden years. There are no scholarships or grants for your retirement.
I hope these six tips will help you and your child have a stress-free college and post-college experience.