Student loans might be the first thing to come to mind when thinking of ways to pay for your child’s college education, but there are other options. From grants to scholarships, here’s a few ways to fund that degree:
Choosing the Right School
Choosing the right school can be tough, so be sure to ask your child what they’re looking for. Would they prefer to live in a city? What do they want to study?
Research prices for public vs. private and in-state vs. out-of-state schools as those differences will likely be the biggest considerations for total cost.
Gather information on prospective schools and schedule visits. Many schools also offer an overnight visit for your child, so they can experience what campus is really like.
Average College Costs
Once your child has chosen a school, you’ll need to estimate the cost of tuition and other fees. For the 2017-2018 school year, the College Board estimates that the average price of a 4-year, public, in-state school will be approximately $25,290 per year. This includes tuition, room and board, books and supplies, transportation and other expenses. Meanwhile, a 4-year public school out of state could cost an average of $40,940 per year.
Live on Campus vs Commute From Home
The average cost for room and board for a 4-year, public, in-state school is $10,800 for a year. Living on campus can provide your child an enriching social experience they might not get at home, but commuting could also save you, and them, a lot of money.
If your child decides to go to school out of state, see if apartment living would be best for them. Sharing expenses with roommates could potentially be less expensive than living on campus.
Because the average cost of college is on the rise, your child might have to look into financial aid and student loans.
In order to see what financial aid they’re eligible for, your child needs to fill out the Free Application for Federal Student Aid (the FAFSA) and check out the resources below:
- Complete the FAFSA, which is available online October 1.
- Complete the CSS profile, which could provide aid outside of the federal government. Also available online October 1.
- Search and apply for private scholarships.
Once your child receives their financial aid package, review and compare what aid they can receive from each school and make your decision.
Students won’t need to pay loans back until they graduate, but make sure they know it’s a good idea to make small payments before graduation. If they can find a job, they could pay down their loans while interest is accruing and save money over time.
You can also look into taking out a Parent PLUS loan. It offers a fixed interest rate and flexible loan limits. This loan can only be used for children in undergraduate programs.
Scholarships for College
There are a wide variety of scholarships available to students that are based on grades, ethnicity, special talents or financial need. Unlike student loans, your student won’t need to pay back money they receive from scholarships.
Have your child start applying early. Many big-ticket scholarship deadlines are in the fall.
Grants for College
Grants for college students fall across two categories: need-based grants and merit-based grants. Grants can be applied to tuition, housing and other expenses for school.
To be eligible for a grant, your child needs to fill out the FAFSA forms. Many grants are awarded on a first-come, first-serve basis. And like scholarships, grants don’t need to be paid back.
Some students who can receive grants are:
- Students with excellent grades
- Students with disabilities
- Students who choose certain careers
Your student’s financial aid package may include work-study. Schools that participate in the federal work-study program provide part-time jobs to both full and part-time students to help them earn money towards their education.
Your child’s job hours will depend on their course schedule and academic progress. They’ll probably be paid by the hour, earning at least the current federal minimum wage.
Tax Benefits for Education
Two tax credits may help you offset the costs of education by reducing your income tax:
Other Ways to Pay
Here are some other ways you can help your student pay for school:
- Set aside your tax refund to put toward tuition
- Get a side gig
- Save any windfalls, like a bonus or a raise
- Use your personal savings
Be sure to look into every option and consider the financial implications. Whatever path your child takes, you’ll be helping them lay the foundation for a successful future.