I’m camping in Colorado right now (er… we’re glamping). That made me think of living in a dorm room, so an idea for college dorm hacks on the cheap was born!
Plus, August is screeching around the corner! You may be spending loads of money on college tuition but might draw the line at accessorizing your child’s dorm room. (That can get so expensive!) Here are some tips, tricks and dorm room hacks to make sure room decor and accessories don’t cost an arm and a leg.
1. Organize with Plastic or Wire Storage Containers.
Space is limited in a dorm, so what’s the first thing you need to get squared away? Yep, storage. There’s no better way to do that then to get small plastic or wire mesh containers. (I suggest getting smaller items. Giant plastic storage containers are great but who wants to dig and dig and dig to find stuff at the bottom? These can go under beds, in closets, even under bathroom sinks if your child isn’t sharing a bathroom with a huge number of students.
2. Use Duct Tape as a Cure-All.
Duct tape is the savior of so many things, whether for cords that beg to be strapped to the back of a desk or for a really old textbook from the “really used” book bin. It can bind a loose textbook or even hold the inside of a winter jacket together if your child’s really desperate. Duct tape is cheap and can (literally) do anything. I remember watching a couple of guys duct taping the bumper of a car back together — it lasted that way all semester during my junior year.
3. Decorate with Fabric Decor.
Residence hall rooms are usually pretty dull and uninspiring. White walls, carpetless floors — they’d make even the most savvy decorator cringe. You don’t need to be an expert designer to work miracles. Grab some fabric and cheap frames at a hobby store and frame the fabric. Your student can choose from a variety of wild and fun patterns and spend next to nothing. Your kiddo can even skip the frames and stretch fabric on canvas if it’s cheaper. Cinder blocks may never have looked so beautiful!
4. Use Carpet Remnants Instead of Rugs.
Skip the rugs — they’re so expensive! See if a flooring store will give you cheap (or free!) carpet remnants. They can be way softer (and homier!) than the usual utilitarian floor in most residence halls. Carpet remnants can be used or tossed at the end of the year.
To go an even cheaper route, find someone you know who’s getting new carpet and ask for remnants of the (new) carpet. They might even give it to you for free.
5. Make Good Use of Dryer Sheets.
Yep, you can totally use dryer sheets for laundry, but there’s another way to save money. Your child can put them on the fan or even the air conditioning unit! Regular air freshener is expensive and your child is not allowed to have candles and wax melts in most residence hall rooms.
6. Use Scarves as Curtains.
Curtains can get super expensive, so why not use a colorful medley of scarves? It’ll at least block out those tacky rolscreen windows with built-in blinds. Your child can opt for sheers or solids and make it as colorful as she wants to. You may even want to sew some together if you’re not too concerned about getting them back.
7. Forgo Plastic Hangers for Wire Hangers.
We all know there’s super limited space in dorm room closets. The metal bar for clothes may only be a foot or two long, so use wire hangers instead. I learned this trick at my parents’ business. My dad owned a dry cleaners and we only used wire hangers at our house. Trust me, they take up way less space and you can buy them cheap.
8. Use Hair Ties to Create Double Clothes Hangers.
There’s a reason I listed clothes storage twice — it’s a big problem in dorm rooms. Instead of buying more hangers (that won’t fit in the closet anyway) twist hair tie ponytail holders all the way down to the neck of the hanger, then loop them there so you can hang an extra shirt or pair of pants in front. You can also use pop tabs if you have a lot of those laying around, but hair ties are often bunched up in all sorts of drawers (they are in our house, anyway!)
Another piece of advice: Make sure your child doesn’t take every single piece of clothing she owns to college. It won’t fit and she likely won’t wear all of it, anyway. If you can, plan to take just one seasonal wardrobe at a time. For example, take fall gear to school in August with one light jacket. If you live close enough, you can meet up with winter gear in October or November, or have it shipped if your child is going to school far away.
9. Use a Storage Cart for Bedside Essentials.
Thrift store finds like a storage cart can be perfect to store bedside essentials. It’s a great place to stash a laptop because your kiddo’s too tired to make it to the desk in the middle of late-night studying. Your child can also store books, phone, snacks and more on it if there’s just the teensiest bit of energy to slide these materials off the bed.
10. Rehome Some Things from Home.
There’s no reason your kid needs to buy brand-new things to make a residence hall room cute. There’s plenty of stuff lying around that could migrate to school. Why not paint Grandma Flora’s lamp that hasn’t been used since 1975? Rehome pencil holders and use old paint cans for storage — once they’ve been decorated?
Now’s the time to get creative! What else can be reused? A duvet stashed in the back of the closet? Who says everything needs to be brand new?
Final Tips
Dorm room hacks shouldn’t be as hard as helping your child figure out her college major. This is easy stuff. Do you live close to the college where your child is planning to attend? You may be able to tour your child’s future residence hall room. If you’re a little further away, you may be able to have someone from the admission office take photos of the room ahead of time so you and your child can plan some great ways to decorate that cinder block room.
Don’t forget a few other essentials:
Surge-protected power strip: You’ll need one to set up your child’s electronics and protect them from electrical surge damage.
Long phone charging cord: There are a limited number of outlets in rooms, so an extra-long charging cable can come in handy.
Mattress pad: Don’t forget this little detail! The pad makes the mattress comfier and feels like home.
Trash can: Residence hall rooms don’t come with trash cans in most cases. You can pack things in a trash can when you’re packing up your child’s school items, too!
Command strips: Don’t be destructive when you’re hanging things on your kid’s walls. They’re perfect for hanging heavier things, too!
Masks: Don’t just bring one mask — they’ll need to be washed every other day or so.
Hand sanitizer: Don’t forget to have an ample supply of hand sanitizer on hand for your child.
Disinfecting wipes: Buy disinfecting wipes or make your own. It’s easy!
I loved it when families came for college tours. They were excited, happy and sometimes even nervous. However, some families weren’t sure what questions to ask because everything (everything!) was new to them.
I compiled a list of must-ask questions to ask on a college tour for admission counselors, financial aid professionals, professors, coaches and more. You may think of others that pertain directly to your child’s situation, but this should give you a great start!
The student tour guide offers the most candid look at what a college is like. Spend as much time as you can with your child and the tour guide and make sure your child asks questions, even if the tour guide probably isn’t going to be your child’s best friend. Yes, the student is groomed to give canned responses to some questions but talking to the tour guide is the best way to get a feel for a college.
What’s your favorite thing about this college?
What’s your least favorite thing about the college you attend?
Where might my child spend a lot of time if he/she is a student here?
Why did you choose this college?
What are the students like?
Which residence hall is your favorite? Where did you live your first year?
Where do you live now? Why did you choose to live there?
What is the food like?
What is your major?
Is this a suitcase college? (Do people go home a lot on the weekends?)
What activities does the college have available for students?
Is it easy to get an internship here? Have you had an internship?
How available are professors?
How does the college handle communication?
Have you found it difficult to handle the costs of college?
What are your plans for after graduation? Do you plan to go to graduate school? Get a job?
Is it easy to get a work-study job on campus? Why or why not?
Where do first-year students typically get assigned for work-study? Can they request a work-study job?
How have online classes gone due to COVID-19? Has that been a seamless transition?
Are the classes rigorous? Have you found them manageable?
How do you manage classes and athletics? (If the student is an athlete and your child is a prospective athlete as well.)
How many tours did you go on before you chose this college?
Is this college far away from your hometown? How do you manage going home during breaks?
Is it easy to get involved in extracurricular activities?
Was it easy or difficult for you to get accepted into this college? How many other colleges did you apply to?
What do you do for fun and what is the social scene like?
What was the most surprising and difficult thing about adjusting to college life?
Admission Counselor Questions
You can call an admission counselor an “admission counselor” or an “admissions counselor.” What does an admissions counselor do? Check it out before you go on your visit! Generally, this is the person who will help you throughout the college search process. Your child will be assigned an admission counselor based on geography. You can search a map of the United States on any college’s website and find your child’s admission counselor. Here are some great questions to ask your child’s admission counselor. (I spent 12 years in college admission and I loved it when families asked me these questions!)
Admission Requirements and Process
What’s the application process?
What is the admission process, from start to finish, and what should my child expect after an application?
What ACT/SAT scores does my child need to attend your college? Is it optional?
Do you superscore test results (take the best score of each subject test on multiple ACT or SAT dates)?
Can my child self-report my standardized test scores?
Should my child aim for a certain grade point average? What are the requirements?
Does my child need to submit an essay or letters of recommendation? If so, what are the requirements?
Are there any other admission requirements we need to be aware of? What types of supporting materials does my child need to provide?
Does my child need to do an interview with an alumnus or college staff member to be admitted?
Are there different admission requirements for various departments or majors?
How can my child make his or her application stand out?
What are the most important admission factors at your college or university?
Do you accept the Common Application, the Coalition Application or the Universal College Application or do you have your own application?
What types of deadlines do you have for your applications?
Do you charge an application fee? How do we pay it?
Can we get a waiver for the application fee if the fee is a hardship for our family?
Do you have an applicant portal my child will need to use?
What are your recommendations for teacher evaluations, if required?
What does your ideal applicant look like?
How do you look at extracurricular activities and work experience in the admission process?
If my child applies early decision or early action to another college or university, can he or she apply to another college?
Do you defer admission to some students? If so, why, and what can my child do to be admitted?
Can my child defer admission once admitted?
Is the rigor of my high school taken into consideration when my child applies?
Who will read my child’s application?
Will it help my child to take advanced, accelerated or honors courses?
Can my child add/remove something from his application once it’s submitted?
How does my child track the status of her application?
Does your college ever rescind an admission offer?
If my child is rejected Early Decision, can he apply Regular Decision?
Does my child need to submit mid-year reports of her grades?
Are my child’s chances for admission to your university’s graduate school greater if she attends your university as an undergraduate?
How should my child submit transcripts from any college courses?
Are admission requirements different if my child is homeschooled?
Will my child’s financial aid award be different if she applies for admission under Early Decision, Early Action, etc.?
When do application decisions become available?
Is there a maximum number of students admitted from a particular country, region or school?
How should my child submit standardized test scores?
How do you determine which credits transfer?
Is admission competitive? How competitive?
Future Visit Details
You may want to come back! In that case, check with the admission counselor you’re talking to so you can find out which options are best. Check out my ultimate guide to Here are few questions you could ask:
Which visit days should my child attend throughout the year?
How do we arrange an on-campus overnight visit?
What’s the best way to arrange future visits in general?
What does a visit schedule look like if my child chooses to arrange future visits?
In your opinion, is it best to do a group visit day if we choose to visit again or is it best to do a personal campus visit?
Do you have competitive academic scholarships my child can interview for (and come back to campus another time)?
Academic Details
Why not ask the admission office about academics? Admission counselors can offer a candid overview of academics at the college they’re working at because what do they do all day long? They talk to current students who work in the admission office (and also hear their complaints and what they celebrate).
Do professors have an open-door policy? How accessible are they?
Are teaching assistants or professors the ones who teach the classes?
What is the average class size?
What is the student to faculty ratio?
Can you tell me about the [insert name] major? What are your most popular majors and classes?
How are classes selected?
Are there required first-year classes?
My child’s favorite subject in school is [insert favorite subject]. How can that translate to a major here?
How rigorous are classes here?
Tell me about academic support services here.
Does your college provide services if my child has a disability?
What is your graduation rate?
How many students go on to graduate school or become employed after graduation?
How many students get jobs in their majors or a related field?
What types of internships are available for students?
Is it possible to do research as an undergraduate student?
Is your school on the semester or quarter system?
Does your school offer pre-professional majors?
Are tutors available?
Demographics, Social Life and Other Activities
What types of clubs and organizations can my child get involved in?
What are the most popular clubs and organizations?
What’s the social life like on campus? What do students do for extracurricular activities?
What would you change about this college or university?
Do students usually attend sporting events, theatre events or more?
Is it possible for my child to start his or her own club or organization? What is the process to do that?
How many students study abroad? Is it a popular thing to do? How is study abroad structured here?
Is it easy to manage a collegiate athletic career and academics? How do coaches approach academics and athletics here?
What security measures are in place at your institution?
Is on-campus housing guaranteed?
Is my child required to live on campus?
How does the meal system work?
Is it easy to find a student job on or near campus?
How is housing assigned?
Can my child live on campus during school breaks?
How safe is the campus and the surrounding neighborhood?
What is the percentage of students of color on campus?
What is the percentage of students who live on campus?
Can you tell me the male-to-female ratio on campus?
How does parking on campus work?
Where are students who go to your school from?
How does your college or university accommodate students with food allergies?
What role do parents play in your community?
What is your freshman retention rate?
Financial Aid Professional Questions
You might want to meet with a financial aid professional as well — and that’s a great move. However, if you can’t get an appointment with someone in the financial aid office, admission counselors are well-versed in most financial aid topics and should be able to walk you through an award letter or answer basic questions about scholarships and loans. Here are some questions you may want to ask:
What is the tuition, room, board and fees at this school?
How much does tuition increase each year? Do scholarships increase to match the change?
What scholarships can my child qualify for? How does my child qualify for them?
Are there any merit-based scholarships available at your school?
Can my child receive grants? If so, what are the requirements?
How do loans work and how should we apply for them?
Can you explain in detail how a financial aid award is set up?
What amount will my child receive, using your school’s net price calculator or a financial aid estimator?
What are the interview or audition requirements for certain scholarships?
Can my child apply for talent-based scholarships?
What will happen if our family’s financial aid situation changes while my child is at your school?
Will my child qualify for work-study? How does work-study work here?
Does my child need to report outside scholarships? Will merit-based scholarships be “taken away” if my child receives a large outside scholarship?
Where should we send checks for outside scholarships?
Do we need to complete a CSS Profile?
How will we know if the FAFSA has been submitted correctly?
When will my child receive the financial aid award?
What is the deadline for applying for financial aid?
My child is undocumented. Is my child still eligible for financial aid?
How does financial aid work if my child studies abroad?
Can veterans or children of veterans receive financial aid at your school?
Can we apply for financial aid in future years if we do not apply the first year?
Will you help me file the FAFSA in person?
What kind of need-based aid can my child get?
How is work-study awarded?
How will the financial aid office help our family break down the costs?
What does the average student receive in financial aid from your school?
Are there other extra expenses we’ll need to be prepared for, like activity fees, biology lab fees, etc.? Can you give us a list of those additional expenses?
Faculty Member Questions
Many colleges and universities will grant you time with professors — you just have to ask. It can be intimidating for your student to meet with a faculty member but it’s well worth it! After all, your student may have that professor for classes. A professor can change the trajectory of a your student’s career and life. Here are some questions you and your child can ask:
Which classes do you teach?
What is your favorite class to teach? Why?
Why do you teach here?
What is your teaching style?
How often do terminal degreed professors teach the classes?
What are your top expectations at the beginning of any semester?
Do you help students with connections for internships and jobs after graduation?
Are undergraduates able to get research opportunities?
How do you measure success in your classroom?
What does a typical syllabus look like in one of your classes?
How does advising work? What’s the process to put together a student schedule?
When are your office hours? Is it easy for students to get their questions answered?
What is your average class size? For introductory classes? For advanced classes?
What are your most successful students doing now?
How do you communicate with students?
Do you put an emphasis on interactive or group work or put an emphasis on lectures?
How do you choose the textbooks a student will use during the semester?
Do you consider yourself to be approachable?
What should my child do if he or she is having trouble in your class?
Do you have teaching assistants (TAs)?
Are there any supplemental instruction (SI) sessions my student can go to during any given semester?
How have you handled online learning during COVID-19?
How much time do your students spend studying and completing assignments during the week?
Are your classes reading and writing intensive?
What types of issues do students bring to you during office hours?
Is there a capstone project or internship requirement for your program?
What does a typical path to graduation look like? What exact classes are required?
How long does it take the average student to graduate? Four years? Five years or more?
What is the academic community like in your department or program?
What resources are available to me?
Is service learning or similar opportunities for hands-on learning a priority in your classes?
Do you help students determine their career path or calling?
Do your students make connections between their academic studies and activities outside of class? Can you give us an example?
How do you work with students who choose to study abroad? Is there a best time during the academic program?
What other majors and minors do students usually combine with this major?
Do you do any other research or other projects that can affect what you teach here?
What are students surprised to learn when they’re in your class?
What do you do when students realize your major isn’t a fit?
Coach Questions
You want to be sure that a college is a good fit for your child athletically if your child is an athlete — but make sure it’s a great fit academically and socially as well. Note that you’ll want to ask the admission office questions about grades, admission, SAT, ACT, academic scholarships, etc. — coaches should not answer admission questions.
A quick tip: Don’t bring up athletic scholarships right away — a coach wants you to demonstrate a team commitment first. Here are some questions you and your child may want to ask a coach.
Why do you coach? What is your coaching philosophy?
What are the holes in your program that my child can help fulfill?
How do you recruit?
What are you looking for in the right recruit?
Can you describe your program’s values?
What does a typical day look like for a player during the season?
How about the off-season program? What are the expectations?
How do you encourage your players academically?
What are the academic requirements for your program?
What do your players do during their free time?
Can you tell me your team’s total GPA and graduation rate?
Do the players typically live together on campus?
Is it easy for players to catch up after missed class time for games and meets? How do they usually do that?
My child wants to major in X. Is it possible to major in this and still play for your program?
How much of an impact do you see my child making on the team right away? Later on?
What does my child need to do to be evaluated by your staff?
Can you tell me more about your assistant coaches? What are their philosophies?
When does your coaching contract end? Do you see yourself here another four years?
How would you describe the team chemistry?
What are the current strengths and weaknesses of your team?
Get Your Questions Answered
I’ve included a lot of questions on this list! You’ll keep yourself pretty busy if you ask every single one of these questions on your college visit. However, note a few, write them down, take this link with you on a visit. Maybe this list will also inspire your own questions on your visit!
Here’s a little-known fact: There’s no law that says you have to pay for college using student loans. In fact, I encouraged everyone I came in contact with during their college tours to get as creative as possible as they carefully mapped out how to pay for college.
As interest rates drop, it’s natural to think that there may be other options to pay for college. Only one percent of parents used a home equity loan to pay for college, according to a 2015 Sallie Mae study called How America Pays for College.
But what if you did tap into your home equity to pay for college? It’s worth exploring! However, also know that it might not be the right fit for you at all. Let’s explore your options.
What is Home Equity?
The words “home equity” sound complicated, but it’s actually really simple — home equity refers to the amount of your home that you actually own. As you make payments on your mortgage, you reduce your principal, the amount you owe on your loan. As you do that, you build your home equity. You only own the percentage of your home that you’ve paid off. Your mortgage lender owns the portion of your home until you pay off your loan.
See, simple! Are you with me? Here’s an example:
Let’s say you bought your house for $100,000 with a 20% down payment of $20,000. You automatically get $20,000 in equity on closing day. Every mortgage payment helps you build more and more equity, as long as your home value doesn’t drop.
What happens when you’ve fully paid off your mortgage? That’s right — you’ve got 100 percent equity in your home, and that’s a beautiful thing.
How Do You Determine Your Home Equity?
Don’t know how much equity you have? That’s okay. I didn’t really know how much equity we had in our home, either, till we refinanced. The mortgage payment was one thing around my house that actually took care of itself — unlike our kids, garden and landscaping. We had it set up on autopay and it truly didn’t need a lot of attention. (I know, not the best approach. It’s always good to know exactly what your home equity is at any given time.)
Here’s how to figure out your home equity:
Log in to your lender’s website or call your lender to determine how much you owe.
Figure out how much your home is worth. Subtract your loan balance from your estimated home value. For example, let’s imagine you owe $100,000 on your home and you believe your home is worth $200,000. Subtract $100,000 from $200,000. This means you have an estimated $100,000 in equity in your home.
Keep making your monthly payments if you want to continue to build your home equity. Simple, huh?
Types of Home Equity Loans and Lines of Credit
Resist hitting the snooze button here. Let’s very briefly go over a few points on home equity loans, cash-out refinances and home equity lines of credit (HELOC).
Home Equity Loan
A home equity loan is exactly the same thing as taking out a second mortgage. You repay the loan with equal monthly payments over a fixed time period (just like you did with your original mortgage) and you receive the money as a lump sum amount. Your home is used as collateral to protect your lender in case you’re unable to pay back the money you owe and you default on your loan.
The amount you can borrow usually depends on your lender, but is usually limited to 85 percent of the equity in your home. The actual amount you’ll be able to get also depends on your income, debt-to-income ratio, credit history and the market value of your home.
Cash-Out Refinance
A cash-out refinance is different from a home equity loan. To put it simply, you borrow more than you owe on your mortgage and pocket the difference.
When you get a second mortgage, you add another payment to your list of payments every month. A cash-out refinance is different — you pay off your old mortgage and replace it with your new mortgage.
Here’s how it works. Imagine your home is worth $150,000 and you’ve paid off $50,000. This means you still owe $100,000 on your home. Let’s also say that you want to use $10,000 to pay for college.
A cash-out refinance lets you take a portion of your equity and add that $10,000 to your new mortgage principal. In other words, your new mortgage would be worth $110,000 — the $100,000 you still owe plus the amount you want to borrow for college. You’ll get the $10,000 a few days after you close on your new refinance.
Home Equity Line of Credit (HELOC)
A HELOC is a second mortgage just like a home equity loan. However, you don’t get your money in a lump sum like you do with a home equity loan. Instead, think of a HELOC more like a credit card. HELOCs allow you to draw from your predetermined loan amount as you need it.
You can draw from your HELOC between five and ten years and just need to pay interest on the money you take out. Let’s say you have $50,000 equity in your home. You can take out money as you need it for college during the draw period and will only pay interest on the money as you take it out.
When do you pay off the loan principal? Not until the end of your draw period. The repayment period usually lasts 10 to 20 years and you pay both interest and principal on the amount you borrow.
Another difference between HELOCs and home equity loans is that the rate is adjustable over time, which means it changes over time depending on the prevailing interest rate.
Mouse Traps
Ha ha, do you like that section header? I named it that because we currently have a mouse in our van and even worse, my husband can’t find it. I am driving a van that has a mouse currently living in it. I bet it has babies. I bet it has a whole brood of baby mice.
It’s horrifying. I keep expecting a mouse to jump onto my lap as I’m traveling 55 miles per hour down the highway. I’ll be holding a mug of tea, my mug will fly out of my hands and I’ll wrench the steering wheel in horror and crash into the ditch, sending the mouse and everyone in the car flying through the air with second-degree tea burns.
Anyway, I digress.
Cons of Tapping Home Equity to Pay for College
Even if a home equity loan offers a lower interest rate than private loans or even federal loans, a low interest rate isn’t the only reason to go after a home equity loan. Here are some major downsides to using a home equity loan to pay for college:
Your home is used as collateral. What happens if you can’t pay back the loan? Your house can be whisked away by the bank — just for a college education. That’s a pretty big risk.
Home equity loans don’t offer much flexibility. Federal student loans offer forbearance and deferment options. In other words, your student may be able to temporarily stop making loan payments. (The main difference between the two is if that deferment means no interest will accrue on your child’s loan balance. Forbearance means interest does accrue on your child’s loan balance.) In some cases, federal student loans can be completely forgiven — your child doesn’t have to pay them back at all.
Interest rates might not be lower. Compare student loan interest rates to home equity loan interest rates. Which ones are higher?
Pros of Using Home Equity to Pay for College
Ease. As long as your credit score and debt-to-income ratio is good, tapping into your home equity is fairly easy to do. Note: It usually takes 30 to 45 days to get a home equity loan, HELOC or cash-out refinance, though that depends on the lender.
Tax benefits. Interest is tax deductible on home equity loans, HELOCs or cash-out refinances.
Interest rates might be lower. They might be lower than private student loans. However, it’s worth looking into if a private student loan carries a 5.25 percent interest rate and you can get a home equity loan with a five percent interest rate. Even a quarter of a percentage can make a difference.
Other Things to Consider
Having a lot of equity in your home isn’t a guarantee that you’ll get a home equity loan, cash-out refinance or HELOC. You still need a decent debt-to-income ratio and credit score to be able to tap into your home equity and you’ll also need to get a home appraisal. I’ll briefly chat about debt-to-income ratio and credit score and how that can impact your ability to tap into your home’s equity.
Your Debt-to-Income Ratio
Lenders use something called your debt-to-income (DTI) ratio to determine how your monthly debt payments compare to your monthly income. Your DTI should be around 43 percent. You can calculate it yourself:
DTI = Total Monthly Debt Payments / Gross Monthly Income
Add up all of your monthly debt payments, including your primary mortgage, student loans, car loan, credit card bills, alimony, child support, etc.
Divide the sum by your gross monthly income (your income before taxes and deductions).
Multiply by 100 to find your DTI.
Here’s an example. Imagine all your debts total $2,000 and you earn $5,000 a month before taxes, your DTI would be 40 percent.
Your Credit Score
Lenders will also be interested in learning more about your credit score. Simply put, if you want to obtain a home equity loan, your credit score should be 620 or higher. However, if other qualifications (like your DTI) are higher, a credit score a little lower than this might be overlooked. However, the higher your credit score, the lower your interest rate will be.
Next Steps
Reach out to various lenders to determine whether one of these options are right for you. Ask about:
Closing costs
Annual fees
Home appraisal expenses
Taxes
How long it will take to pay off your loan
Length of time to get a home equity loan, home equity line of credit (HELOC) or cash-out refinance
Private student loan options
The total cost you’ll need to repay
You don’t need to stick to the same lender that provided your primary mortgage. Reach out to other lenders (challenge yourself to look into five!) because others might offer better interest rates and terms.
Determine Whether to Tap into Home Equity for College
I tell everyone who will listen that I recently refinanced my home. The interest rate I got was so low I couldn’t believe it — I didn’t think interest rates could possibly get lower than 4.25 percent — our original interest rate. Now I’m the proud owner of a 2.25 percent interest rate mortgage!
So. Here’s the problem. You might start snoring hard every time you hear the words “home equity.” But don’t! It’s easy to plod along, which is what my husband and I were doing until I heard a podcast host say, “You need to look into refinancing. It could change your life.”
I stopped, mid-plod. “Whaaaaa???”
Now, a refinance is different from a home equity loan. But the point is, it’s easy to get complacent and not look into all your options. If I hadn’t listened to that podcast, we’d still be stuck with an interest rate that wasn’t right for us.
Do some careful searching to make sure that tapping into your home’s equity is the right way to go. Sure, interest rates might be lower than private student loans, but remember, your home is on the line.
“My child’s going to be a … freshman/sophomore/junior/senior/eighth grader!”
Has this realization hit home multiple times this summer?
Does it feel like life is going at warp speed? If so, I hear ya. I mean, wasn’t it just May? Uh, and wasn’t kindergarten a week ago?
Now that the start of the school year’s almost upon you (are you as nervous as me?), you may be faced with an unsettling feeling that has nothing to do with germs.
Your internal voice may be saying something like this: I haven’t saved much (if anything) for college.
You’re not the one with a block of ice in your stomach. After all, there’s nothing like the start of school to make this paralyzing realization hit hard.
It’s okay. You can still save for college, even if your child’s going to be a senior. It’s never, ever too late. Here are your options for college savings strategies — and keep reading for a quick win!
Why Save for College?
It might be hard to gather the excitement and momentum to save for college if you haven’t been doing it since your child was a baby. You miss out on compounding interest over time when you haven’t saved for years. (Compounding interest is additional interest added to the principal sum of your initial investment. In other words, it means interest on interest.)
But remember, 18 years is actually a relatively short amount of time compared to 30, 40 or more years — a lifetime of working and saving for retirement.
Something is better than nothing at all!
Here are some great reasons to save for college, even if it’s only a year away:
It’s a great idea to get in the habit of pretending like you’re making installment payments toward college. Do you know that your regular earnings have great power and potential? In other words, you can do a lot to contribute for college with your regular paycheck. An installment plan is a monthly payment plan that helps you pay for college, typically during an eight, nine or 10-month period. Saving for college before you make installment payments prepares or when you actually need to start making payments.
You may be able to amass a nice chunk of change. Like your parents always told you, it’s amazing to see what you can do when you set your mind to something. Start with a goal in mind and watch it blossom into a tangible amount of money. It’s amazing how much power a little idea generates!
Family members might be able to chip in. Many 529 plans make it easy for family and even friends to contribute. Sometimes, it’s just a matter of giving friends and family a link and a code to your child’s 529 account. (We’ll cover 529 plans in a sec.) The dollars can really start rolling in when you tell your child’s grandparents, aunts, uncles, godparents, church family — who else can you add to the list? Make it a policy that now that your child’s in high school or approaching high school, clothes and video games are not acceptable birthday or holiday gifts. Ask for money instead.
You might have already saved more money than you think. Did you know that you can use money from your Roth IRA tax-free to make payments for college? And you can use money already collecting dust in your savings account for college. It’s a matter of reframing your intentions and building even more momentum so you can save even more. But don’t stop saving, even if you realize you’ve got more in the hopper than you realized.
It’ll help your child take out fewer student loans. The more you pay out of pocket, the fewer loans you’ll need to cosign or that your child will need to take out. That’s a pretty good reason all by itself!
Now, onto my super secret quick win!
1. Here’s the Quick Win!
Here’s how to get a quick, quick, quick win. Will you promise you’ll do it with me? Okay, great!
UNest is awesome because it literally is so easy. You don’t have to fill out mounds of paperwork. You can choose investments based on your child’s age, add your bank account and you’re done. It takes minutes.
Friends, it’s literally that easy to set up a 529 plan.
Okay, so I can hear the rebuttals now: But what if I don’t want to use a 529 plan for my kids? What if I want something with more flexibility? I’m scared. I don’t like to make decisions like this.
Taking action is the antidote to fear and inaction. I know how easy it is to put something off because you’re scared of the unknown. Open that account anyway, and here are the next steps you can take.
2. Determine how much you can save per month.
Saving is a delicate balance of filling all the buckets, isn’t it? You’ve got the grocery bucket, mortgage bucket, car payment bucket, and on and on. Now that you have the college bucket, how much can you put in it?
Sometimes it’s easier to start small and work your way up. Don’t pledge right off the bat to save for every penny. (Remember, your child may get scholarships.) Sometimes those unattainable goals or seemingly impossible goals make us quit before we’ve even started.) Don’t do that to yourself. Make sure it’s attainable!
Also, only take into account reliable income when setting your goal. If you need to adjust your goal, that’s okay, as long as it’s realistic.
Here’s a common tripping-up point: How much should you save? Save as much as you possibly can! Your goal of saving for your child’s education is an admirable one.
3. Write it down!
Why is it that we’re more apt to scrape and pinch and divert money from one source to pay a bill but we don’t do the same to pay ourselves first?
For example, in my own life, we just paid our taxes (at the very last minute) but I made sure we had enough money in our checking account over the last couple of weeks to make it happen. What if I applied that same kind of care to making sure I saved extra throughout the year?
Pretend like saving for college is another obligation — and write down your goals! There’s so much power in writing it down. It can look something like this:
“I plan to save $1,000 every month for my child’s college education. I will not stop until I have $24,000 in an account.”
Writing down a goal helps you:
Reduce the possibility of failure. Specific goals — written down! — mean you’re more likely to achieve them because you have a constant reminder of what you’re working toward.
Focuses you: Life is crazy most days, right? Goals help you be more strategic because you can zoom in on what you want to achieve.
Measure your success: It’s easier to determine whether you’ve had success when you have goals you’ve started with. Nothing feels better than seeing how far you’ve come compared to where you started!
Keeps you motivated: You build momentum when you’re hitting your goals and feel like there’s nothing you can’t do. Think about the last time you worked really hard for something! How did you feel? Chase that feeling by setting goals and achieving them!
4. Choose the right college savings strategies for you.
You can find literally hundreds of investment options available to you, from state-sponsored 529 plans to regular savings accounts. Unfortunately, that’s part of the problem. The part that trips people up the most is not knowing where to put their money.
529 Plans
Wondering why the heck you’d open a 529 plan if it’s not going to gather much interest in just one or two years? Here’s a great reason: Opening up a 529 in one child’s name doesn’t mean that money needs to go to only that child. 529s can be transferred to your other children — or anyone else, like your niece or nephew.
You’ll be able to find two different types of 529 plans: prepaid tuition plans and education savings plans.
Prepaid tuition plans are plans in which you can pay in advance for all or part of the costs of attending a particular college. In other words, you can avoid future tuition jumps.
Education savings plans are a tax-advantaged savings account designed to be used for education expenses. You won’t pay income taxes on earnings as long as money stays in the account. When you pay for qualified education expenses (tuition, room, board, fees, books, etc.), those withdrawals may be federal income and state tax-free.
Pros:
All 50 states and the District of Columbia sponsor at least one type of 529 plan. Look into your state’s 529 plans for more information and to sign up or go to the handy UNest app for an even simpler experience.
The tax advantages are excellent!
Cons:
Funds must be used for qualified educational expenses.
You’ll pay fees for each type of plan.
You’ll also encounter some ownership rules. You (not your child!) gets to make decisions about how the money is used.
Roth IRAs
Just like with a 529 plan, you won’t pay income tax when you contribute to a Roth IRA. Your contributions and earnings grow tax-free. You can withdraw contributions at any time, for any reason, tax-free.
The annual contribution limit for 2020 is $6,000, or $7,000 if you’re 50 or older.
Pros:
The beauty of using a Roth IRA is that it has a dual purpose — you can save for retirement and college.
Cons:
Taking out too much from your Roth IRA could hurt your future retirement goals.
Contribution amounts are limited to annual maximums. You’ll also face income restrictions.
Coverdell Education Savings Accounts
A Coverdell education savings account (Coverdell ESA) is a trust or custodial account you can set up to pay qualified education expenses for your child. ESAs offer tax-free qualified withdrawals and contributions are limited to $2,000 per year and there are income limitations too.
Coverdell accounts can cover educational expenses from kindergarten all the way through grad school.
Pros:
Offers a wide variety of available investments and tax-free growth.
Offers more flexibility than 529 plans.
Cons:
The beneficiary changes are not as straightforward as with a 529 account and can vary by custodian (the financial firm hosting the account).
Growth potential isn’t as great.
All assets must be distributed to the beneficiary by age 30.
Other Investment Types
I’m going to list a few other types of investments you may want to look into:
Also, remember that there are no rules here. You can combine strategies — you can use a 529 plan and a Roth, CDs and ETFs.
Make Sure Your Goals are Achievable — You Can Do This!
Post a sticky note with your kiddo’s last school picture on it. Scribble “1,000 for college” on the note. Knowing your “why” will help you stay motivated in months that feel like a major challenge.
It’s not too late, and you can do this. Set that goal, attack it and keep moving forward. You can do it!
It’s July, and while it might seem like it’s a great time to catch up on Netflix, go to the pool and work at a summer job, why not get a jump start on college?
(I knoooow, convincing your high schooler might be a different story.) It’s even more important to start thinking about college now because we don’t know what college visits will look like for next year. Lots of colleges have closed up shop but many are still open for visitors. Take a quick peek at the list of schools open and closed to visitors from the National Association for College Admission Counseling (NACAC).
I reached out to a mom friend of mine who has a rising junior and asked her what her concerns are right now. She said, “Coronavirus has changed things. What should we do right now to get ready for college? It’s a little frustrating.”
I hear ya.
Here’s a quick list of items your child can consider doing (after lounging by the pool and taking lots of sips of fizzy lemonade, of course):
Get ready for the PSAT test and ACT or SAT tests (if required)
Start doing college visits (either in-person or virtual visits)
Consider the activities on that resume — and whether there are gaps
Put together a robust schedule of classes
Start a college list
Develop relationships with admission counselors
Now, one of the most important things you can do during this time as a parent is to make the college search exciting. The last thing you want to do is scare your child off before this process even begins!
Here’s how to help your child launch the college search this summer, even though things might not be (totally) normal.
Get Ready for the PSAT, ACT or SAT Tests
You can find some great test prep resources for PSAT, SAT and ACT. Check out Amazon or your local bookstore. You can even check out the local library for these editions, though your child won’t be able to write in anything from the library, of course!
First, let’s define PSAT, ACT and SAT — it’s easy to confuse PSAT and SAT in particular.
PSAT: The PSAT’s formal name is the Preliminary SAT, also known as the PSAT/NMSQT (National Merit Scholarship Qualifying Test). It’s a great way to practice for the SAT exam. You can only take the PSAT once per year, and many students take the test in 10th and 11th grade.
ACT: The ACT is a standardized test used for college admission administered by the nonprofit organization, ACT. The ACT test covers four separate academic sections: English, mathematics, reading and science reasoning. Your child can also add an optional writing test. The 2020-2021 ACT costs $55 without writing and $70 with writing.
SAT: The SAT is a standardized test also used for college admission. It’s administered by the nonprofit organization The College Board. The SAT test covers 20 SAT Subject Tests in five general subject areas: English, history, languages, mathematics and science with an optional essay portion. The current SAT costs $52 without writing and $68 with the essay option.
Before your child cracks open some study books, check with the colleges your high schooler plans to apply to. Find out whether the college requires the ACT or SAT. Lots of colleges have waived the SAT and ACT for this year’s incoming class — and many are doing away with standardized testing altogether.
That doesn’t mean throwing test prep out the window or sidestepping a school that still requires it. It might be important to take it, particularly if a school shows up on your child’s radar this year or next and that requires the ACT or SAT.
Make a College Spreadsheet
I developed a very simple, easy-to-use College Money Tips College Visit spreadsheet. You can use this spreadsheet to keep track of the schools your child wants to visit on the left, and as you get knee-deep into visits later on this fall, use it to record things like application deadlines and more.
I believe one of the most important parts of the spreadsheet is the Heart/Gut Test. The former college president at my alma mater coined the Heart/Gut Test to talk to families during visit days and scholarship weekends. Sometimes you just know whether a college is a good match — parents usually feel it, too. There’s a section in the spreadsheet that references how a college felt. You can use this spreadsheet yourself or share it with your student.
Get the spreadsheet below — you’ll also get my free college money tips guide!
Complete Virtual or In-Person Visits
Visiting. Hmmm… It’s a bit of a head-scratcher right now, isn’t it? I understand — virtual summer visits aren’t really ideal. But guess what? There were already several disadvantages about summer visits, anyway. Truth be told, nothing beats a college visit during the fall. Crunching through leaves, watching students hurry to classes — it’s simply the best atmosphere.
Here’s one example of why I believe summer visits aren’t the best: You typically only see staged residence hall rooms. In fact, I was the one in charge of that when I worked in admission! I’d send two or three summer student workers to three of our residence halls to stage rooms using donated items from Bed, Bath and Beyond! It was tons of fun to decorate the rooms but the staged room always seemed… fake and empty, not homey. Here are some other reasons summer visits are less than ideal:
Fewer students live on campus during the summer, so you don’t get the “real” feel of what a college is like.
Tour guides are usually the only students you can really interact with.
Normally, fewer classes are in session anyway, so you’d have limited opportunities to sit in on classes.
Many buildings remain closed to tours.
Professors and department chairs are not around to chat with during the summer.
So, my point is, if you have to do a virtual visit right now, sure, you’re at a disadvantage because you can’t see the campus in person — but summer visits were disadvantageous anyway.
Now, if you have the chance to set up a visit for your child, should you do it? Of course! And if you want to do a virtual visit, here are the perks of virtual visits right now:
You’ll get to see what every part of the campus looks like, even areas closed down during the summer, like the dining hall.
You don’t have to worry about finding a parking spot, fighting traffic and driving or flying to get there. You can watch from anywhere!
It’s less nerve-wracking. If I had a dime for every nervous parent and student that used to walk into the admission office…
You don’t have to worry about the weather. (There’s nothing worse than visiting a campus in the pouring rain or driving sleet or snow!)
Hear me say this: If you have the chance to do an in-person visit this summer, do it. We don’t know what the fall will look like, and being in person on a college visit is better than not doing a college visit at all. Sometimes you just have to take what you can get.
Call the admission office at schools your child is interested in. Ask about:
Tours
Talking with an admission counselor
Scheduling a meeting with a coach
Communicating with a professor about a major — take a look at this great college major quiz before you go!
The nice thing about being a rising junior is that your student still has time. Do what you can now and know that there’s still another year ahead to go on visits.
Learn More About College Requirements and Scholarships
It’s never too early to start searching for scholarships and helping your child learn everything you possibly can about colleges.
There’s no reason your child can’t start applying for scholarships. It’s a myth that seniors are the only ones who can submit scholarship applications. Research a scholarship that’s promising and have your child apply. Why not?
Summer is a great time to learn more about colleges! High school juniors have a busy upcoming year — lots of extracurricular activities, tough classes, standardized tests and more. Help your student learn as much as possible right now.
Talk About College Money
Talking about money might not be your favorite subject. Your kiddo may not be interested in talking about it at all.
The conversation doesn’t have to last for hours! Grab a quick snippet of time to chat about:
College costs in general
How much money you think you might be able to contribute toward college costs
How much your child must contribute to college costs
An explanation of loans and how they work
How scholarships and grants help offset the cost of college and why it’s important to make them a priority
Those are just a few topics that can jumpstart your conversation. Make sure to have the whole family involved — and leave plenty of time for more conversations later on.
It’s okay to hit the pause button if your child doesn’t want to talk. You still have time to have lots of conversations!
Make it Fun, Make it Exciting
It might seem like there’s lots to do! Now’s the time to get started. Don’t forget to make it fun! Include rewards whenever possible. Go out to eat at a restaurant of your child’s choice after your child completes a really gnarly scholarship application or treat your daughter to Starbucks — and have the money talk there.
How will you get some heavy research out of the way together so the upcoming year is smooth sailing for you and your rising junior?
