Having your child go off to college can be simultaneously exciting and overwhelming. As freshmen enrollment approaches, you may start to wonder if you’re financially prepared for this new endeavor. Here are 5 tips to financially plan for college expenses:
Build a budget for “other” college expenses besides tuition: Room and board, class-specific fees (lab fees, studio fees, etc.), meal plans (plus snacks!), books and school supplies, personal care items, laundry, transportation, and spending money for weekends.
2. Scholarships, Grants, and Work Study
Look for ways to pay for college expenses before taking out student loans, such as scholarships, grants, and work study. Make sure you fill out the FAFSA, or Free Application for Federal Student Aid. The key word being free, don’t get scammed by paying to submit your application through a third party. Applications are open as of October 1st!
3. College Savings Account
If you’re starting planning early, Open a Tax-Advantaged 529 college savings account. No matter where you are in preparing for college, it’s never too early to start saving! Having a savings account will prevent the need to borrow for college expenses and leave with less interest to pay in the long run.
4. Child Contributing Financially
Discuss with your child whether they will be contributing financially. They can apply for a work study or get a part-time job to help cover some of their monthly college expenses.
5. Do Your Research
Do your research before taking out student loans. There are many different types of loans depending on your need, such as subsidized and unsubsidized, federal and private loans. Determine the interest rate and when the interest will accrue. Use repayment calculators to determine your monthly payment and the length of repayment ahead of time.
If you’re a parent/student that has already incurred student loans and need help with repayment options, check out our student loan education session. It’s completely free due to partner grants.