The cost of college has been getting higher and higher over the years. Students are now submerged in debt that they spend their lives and careers trying to erase. Parents of a baby born today would have to save $385 a month to afford housing and tuition at the average state school, according to Kent Smetters, a professor at the University of Pennsylvania's Wharton School. If you don't start saving until the child is in middle school, the required monthly savings amount jumps to $780. (source) I don't know about you, but I don't have an extra anything hanging around. When I went back to school, I knew it was going to cost me money, but I was hoping to avoid loans as much as possible. Unfortunately, that is no longer an option with all the fees that schools tack on to those credits. Here are some tips about saving for college that has helped me.
- Start Early – The earlier you start, the more you'll save. That's just the simple mathematical truth.
- 529 College Savings Plan – A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It offers some great tax benefits.
- Get your kids saving – Teaching your child to start saving early is a must. There are some great ways to do this, but the point is to do it. Some families start early for this purpose. The money they save goes to college or even an automobile when they can drive. Imagine your relief if your children can save for everything themselves. Make that piggy bank collect interest each year from birth! Both of my children have a piggy bank, the money that goes into it is specifically for their college education one day. While it slowly builds over time, it also builds interest so that we have more when they get older. We contribute to both accounts monthly as well since pocket change is hard to find these days.
- Make it a habit – If you get yourself used to setting aside money for your savings, then it will be much easier every year. Even families that live paycheck to paycheck should try to set aside what you can. A little amount is better than nothing.
- Rent your books – Buying books each semester can get expensive. Especially when your professor gets a new edition of a book that doesn't have any used copies available yet. Not to mention reselling your books at the end of the semester is a pain.
- Prepay – Some schools allow you to prepay your child's tuition. It's becoming rarer because as rates increase schools want to make their money. But if you are sure your child will go to a state school then it could be very beneficial because you lock in the rates of today instead of when they enter into college. Just beware, if your child doesn't end up going to the state school, you may not get all of your money back or be paying high cancellation fees for withdrawal.
- High Interest Savings Account- Set up a monthly deposit into a high interest savings account and let the bank give you free money. Um, easy money!
- Read teacher reviews – If you knew ahead of time that your professor was a tough grader and that the tests were hard, would you take them? Um, no! Every semester I look up EVERY teacher on the schedule to find which professors are going to be better to take. I'm a full-time student, Mom, and blogger, I need all the help I can get and having a great professor is a way to do that. It can also save you money because you may fail that class due to how tough they are and have to spend the money to take the class again.
- Pick smart loan options – College Ave Student Loans have just launched a new Parent Loan, which offers savings over Federal Plus Loans. With no origination fee and a lower fixed interest rate than the federal program, College Ave Student Loans new parent loan offers qualified parent borrowers average saving of $1,000 vs. the Federal Direct Parent Plus program. When my FASFA award letter comes in, I'm always disappointed that I didn't receive more. When the extra costs start taking up more than I have set aside each semester, I need an option that will fill those gaps, and a good student loan will do that. The Parent Loan is great because you can have up to $2,500 deposited into the parent's account so that you can control what the money is spent on. Like books, dorm supplies, and school supplies. They make the loan process easy so you can focus on your education (or your kid's education). The College Ave Student Loans website, is easy to navigate and get your qualified. They even break it down so you know how much you'll end up paying for the term of the loan.
- Look at the fees – Most schools offer online and offline classes, but there are different fees that come with both. For my first semester, I discovered that I was getting charge athletic fees and facility fees to pay for things like our brand new football team and a fitness center. Things I don't plan on using. The online classes don't have these fees, but they make up for them with technology fees. So if you plan on taking both types of classes, make sure you take the fees into account in your budget and decide if it is worth taking an online class while also going on campus.
Hopefully, these tips will get yours in the right direction. Even if you'd like to start small with something like Upromise just remember that at least you're doing something!
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.