How Will I Ever Pay For My Children’s College Education?

To a four-year college education at schools like Princeton expected to reach $300,000 for children born today, saving up to send multiple children to college is frightening. It is possible; here’s how:

1. Decide what your responsibility is. Before you can start a savings program, you have to decide what your responsibility will be. Will you pay extra for your children to attend any school they want, at any cost, regardless of their grades? Will college be entirely their liability (if so, you can quit reading now)? If you’re like most parents, you’ll find somewhere on that scale that represents your approach to be paid in respect of college. My parents told me they’d pay tuition at the local college and let me are forced to live. Going where else, they’d kick in that much tuition. I went to the state school and lived at home—then got an Ivy League MBA.

2. Start saving. Presuming that you plan to help your children pay for college (you are still reading), the key step is expected to commence saving as soon as possible. The earlier you save and the more you save early the more the money will do the job.

3. Open a 529 Plan. A 529 Plan is a tax deferred savings plan for education expenses. If you don’t have one and you have kids, open one today. If you intend to have kids but don’t have them yet, consider it. It’s almost never too early to begin saving.

4. Get your students involved. From the earliest days, help your children to understand your commitment to their education and what you want from them. Encourage them to save their own money for college, firming their commitment to going at the same time you share the burden.

5. Help your students apply for scholarships. There are very sorts of scholarships, many of which are neither need dependent not merit-based. Using the internet and coaching from financial aid offices, apply for at least a dozen scholarships. Even if you get only a few, the effort will need to be well worth it. For instance, my wife and I are funding a scholarship for students who attended inner-city grade school where my wife taught school for ten years.

6. Make use of tax credits. The U.S. Government provides tax credits for people who pay for college. If you’re paying, you get the credits. Be sure that you understand how to claim the American Opportunity Credit and the Hope Credit, which can help to cover thousands of dollars of educational expenses each year.

7. Use student loans sparingly. Student loans cannot make a payment in bankruptcy. They will hang over you or your student for years to come here. It is hard for an 18-year-old to see how painful that will be. Help your students avoid student debt when possible.

8. Be wise. Princeton and Harvard—and perhaps other schools—charges students from low-income households absolutely nothing to attend. If the student is admitted on a needs-blind basis, there is no cost to participate in. Even the living expenses are covered. Approximately 20% of the students at those schools reportedly attend on that basis. For families with incomes above the minimum threshold, the family’s fiscal responsibility is stepped so as to be affordable.
By following these basic steps, you can build and execute a plan that will assure that your children get a college education without breaking you beforehand or burdening them with a life of student loan payments.