Worried About How to Pay for College? You Can Do It!
DATE: Jul 20, 2018
AUTHOR: Leah Ingram
Do you worry about how to pay for college for yourself or your kids? If so, you're not alone. According to The Princeton Review 2018 Hopes & Worries Survey, most families considering college worry about payment and debt. In fact, this survey found that paying for college has been the top parent and student concern for the past five years.
Money matters will stress anyone out, but with some financial planning, you can feel more confident and excited to invest in your children's or your own education.
If you haven't gotten around to saving for college or you're pursuing a degree mid-career, then financing is probably your best bet. That means student loans.
The best way to get the best rate on a loan is to have good credit. If you have fewer than four years before college tuition payments start, focus on paying down debt and improving your credit score.
Lenders see borrowers with lower credit scores as riskier, which means your interest rate could be higher. FinAid even estimates that you could pay up to 100 percent more interest for student loans if you have bad credit.
For Your Kids: Credits in High School
A great way to help cut down on the cost for your kids' education is by encouraging them to earn college credits while they're still high school. Many high schools offer classes that translate to college credits through College Board's Advanced Placement courses, International Baccalaureate classes or partnerships with local colleges. Your student doesn't have to leave high school to take these classes — the colleges come to them.
Not all colleges or majors accept high school credits, so ask during the class application process if a prospective university recognizes credits earned in high school.
529 College Savings Plans
If you have children, you have probably heard about 529 college savings plans and programs. These are state-run programs that allow you to save money tax-free for college. You may even already have one.
It might be unreasonable to think you can save up all future tuition using a 529 college savings plan, but college comes with lots of additional costs besides tuition. A savings plan is an excellent place to squirrel away money for books, housing and other future education expenses.
Prepaid Tuition Plans
One way to make college affordable is through a prepaid tuition plan, which allows you to pay for tomorrow's tuition at today's prices. These plans are currently at work in Florida, Maryland, Massachusetts, Michigan, Mississippi, Nevada, Virginia, Texas and Washington State.
Prepaid tuition plans are state-run and typically apply to state institutions only. You have to be a resident to sign up, but that arrangement can be perfect if you work full- or part-time and are going to night classes for a bachelor's degree.
Since state colleges and universities tend to have lower tuition than private institutions, prepaying college tuition is more easily achievable. Even if you can get one year paid ahead of time, you can save thousands, if not tens of thousands, in the future.
Scholarships and Financial Aid
Whether you start college at 18 or 38, you can still qualify for financial aid. According to the U.S. Department of Education, there is no age limit for receiving federal student aid to pursue a college degree. In fact, the only limit is the number of semesters it takes you to finish. As long as you get your bachelor's degree within the equivalent of six years of school, you can still be eligible for Pell Grants and Federal Student Aid.
Many universities and outside groups also offer specialized scholarships for working adults, women, people of color and other communities that you may be a member of. Searching sites, such as Scholarships.com, can help you find awards to which you can apply.
Do you dream about your kids or yourself going to college but have nightmares about how to pay for college? Don't worry! A little planning ahead can help set you up for the future.
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