What's the best way to pay for college? There's no one answer. Each family has to find their own best way. Here are a few ideas that might help you find yours.
Along with your home and car, a college education — yours or your child's — may be one of the biggest expenses of your life. But, it's also one of the best investments you can make. Among Americans (1) ages 25 to 32, median annual earnings for full-time working college-degree holders are $17,500 more than for those with high school diplomas only. Here are some tips to help you save for that investment.
The earlier you start saving, the better. There are lots of savings vehicles to help you get started, including 529 Savings Plans or Coverdell Education Savings Accounts. And at , we even offer Education Planning to help you maximize your savings. When your child receives cash gifts at birthdays or other milestones, put them straight into their college savings. If you can contribute even a small amount each month too, that's even better.
Going to a public college can help save you thousands of dollars, especially if you go in your home state. You might want your child to go to a school with lots of name recognition, but remember that they can get a quality education at a more affordable college, too. Starting at a community college and then transferring to a more expensive school is another great way to save money.
Make sure you apply for as many scholarships as you qualify for. It's an easy way to help defray the cost of college, whether it covers all of your tuition, or just the cost of books for a semester. If your employer offers tuition reimbursement for you or your children, be sure to use that, too.
Be sure to complete your family's FAFSA (the Free Application for Federal Student Aid) completely and on time. It will let you know how much need-based federal aid you're eligible for. Schools will use it to determine your financial packages, so it's very important to fill it out.
If after scholarships and financial aid, college is still too costly, it may be worth taking out loans to pay for the difference. Borrow no more than you absolutely need, and be honest with your child about how much they'll owe at the end — and whether you'll be able to help them pay it off.
The answer is up to you — but with college costs increasing every year, the sooner you start, the better. With compound interest, if you start saving when your child is born, you'll have to save far less every month than if you wait for them to start high school or even middle school.
A tax-advantaged investment program designed to help students finance the cost of education. There are two types of 529 Plans: Prepaid tuition plans and college savings plans. All states offer at least one type of 529 Plan. Fees, investment options, restrictions, tax advantages, and other features vary depending on the state.
Learn more about our different savings accounts, and start saving for your child's education today.Request Information