I welcomed a guest post from Lisa Bigelow, an award-winning content creator and mom who learned way too late how to save for college. Check out her helpful tips below!
It seems like yesterday your little bundle was born. Then came first steps, school, a driver’s license. Before you know it, you’re scouring college brochures that come in the mail by the elephant load, grinding out college tours and applications and wondering how to pay for it all.
In 1995, the average cost of a full year of tuition plus room and board at a four-year university was $10,560, according to the National Center for Education Statistics. Fast forward to 2018 and that antiquated figure blooms to an astonishing $27,357 – a near-threefold increase.
It’s safe to say that the cost of college probably isn’t coming down anytime soon. Yet even with the total tab for four years of university exceeding $100,000, for many families, the intrinsic value of higher education is unquestioned.
You know you should start saving now, but how much will you need?
It’s difficult to estimate what college will cost when the big event is far in the future. So many factors affect the cost of attendance, including eligibility for need-based aid and in-state residency, plus the promise of merit awards or private scholarships. Unfortunately, when you start saving, you won’t have the answers to any of those questions.
Nevertheless, families that plan ahead for college expenses aren’t likely to regret it. If you want to pay for four years of university education for your future collegian, here are five saving for college tips.
Contents
Step 1: Set a savings goal early.
First things first: You need a goal. But how much?
Luckily, the College Board — the same organization that administers the SAT — offers a free future cost estimator on its website. Here, you can enter the current cost of one year of school, either public or private, and the tool will calculate the estimated cost of attendance after factoring in your timeline, estimated inflation, and other considerations.
Not sure which value to enter? Consider entering a total of one year of tuition plus room and board at your state flagship university. You can always change it later.
Step 2: Stack rewards.
Setting up a college savings plan is a great idea! Funding it, however, is a different story.
Automating contributions is helpful (and some might say critical), but don’t hesitate to think outside the box. For example, credit card rewards programs, browser add-ons and retailer programs like Upromise are fantastic ways to chip away at that big goal you set in Step One. Earn a reward, deposit it into the 529. It’s really that simple.
Step 3: Go low-tech.
Spare change stored in a water jug. Birthday and holiday gifts from Grandma deposited into your child’s 529. Yard sale proceeds put toward college tour travel costs: All great ways to capture value from otherwise overlooked — or worse yet, wasted — funds.
At the end of every month, empty your wallet, jacket pockets and car of any change and bills you find. You’ll be pleasantly surprised how much it totals — especially when combined with earned rewards. How’s that for one of the easiest but simple saving for college tips?
Step 4: Pursue private scholarships.
You’ve probably heard the rumor that millions in scholarship dollars go unawarded every year, but don’t use that as an excuse not to save for college. There are countless private scholarships that award students on the cusp of high school graduation.
Merit-based scholarships typically award money for academic, athletic or creative talents. But other types of scholarships don’t even require an essay. Have your teen peruse available scholarships like the ones on Bold.org.
Step 5: Explore regional discounts.
Don’t overlook residency discounts, as they can be worth tens of thousands of dollars per year. Some states let you pay tuition years in advance, while others award special scholarships to students in otherwise out-of-state tuition zones. In New York State, in-state residents who meet income criteria are guaranteed free tuition at in-state colleges and universities.
Bonus Tip: Weigh degree cost against future earnings.
Finally, when the time comes to make a selection, carefully evaluate the cost of your student’s degree path against likely future earnings.
Is it worth it to pay $200,000 or more for private school tuition if a public school degree will get your student the same salary after graduation? If not, it may be wise to reconsider.
Thank you! Valuable advice! We’re a little late to start thinking about it – the tuition prices are insane. But there are still a few more years before my teenager will be choosing a college.
Good luck, Lisa! Please let me know how I can help. 🙂