If you haven’t thought about how you’ll plan for college, now is a great time.
Luckily, we have some great resources for you to prepare for education.
Start with: 5 Steps to a Successful College Plan. This piece will give you an overview of what it’ll take to successfully prepare financially for college.
Next, decide which colleges you’d like to focus on in Find Your Perfect College.
Now that you have a plan and are focused on a few specific institutions, read College Savings Simplified. This will cut through the clutter of various college savings plans.
Understand Financial Aid Programs
Many people understand that saving into an IRA plan can damage your retirement plan if you’re going to leave work at age 35. These same people fail to realize that certain ways of saving can severely impact the amount of money you’ll need to save for college for your children. Simply put, different than retirement–which you want to enjoy–college is an experience to survive. If you can succeed in finding a prestigious institution that will cost you nothing to attend, that’s fantastic. For most, the goal is “maximum education for minimum price.”
To receive the minimum price, you must pay attention to how you save money. Colleges will only subsidize your education if you qualify in one of three areas:
- academic scholarships.
- athletic scholarships.
- need-based aid.
If your child is young enough, you can help junior secure good grades to possibly qualify for an academic scholarship. Qualifying is half of the battle. The other half is actually finding and applying for these opportunities. While colleges try and lure the best and brightest they can find, your child in one of millions who’ll attend college some day. Much like a car dealership has to advertise a good deal, you’ll need to advertise your student.
That sounds awful. I’d just rather focus on grades.
Great. I promise you that someone who markets their grades will find many, many opportunities that the person who just focuses on grades alone will find. Hunt. Search. Show off your honor roll student. Colleges will pay you back by showing you opportunities you may not have discovered if left on your own.
Although every parent would like to think that their gifted athlete is headed for an NCAA Division I scholarship, this isn’t normally the case. There are far more gifted athletes than there are programs available. Even if you do have a child with a natural ability to run, jump or throw, you’ll need to still shop your athlete to schools to make sure coaches know you’re interested.
Scholarships often go to students who successfully market themselves rather than the most qualified individual.
That leaves need-based aid programs. A dollar saved depends on how it’s saved. If it’s saved in the students name, it counts differently than if it’s saved in a parent’s name. Also, money in a retirement plan is counted differently than cash in the bank. How you save is vitally important when a college is counting up how much you have. Do yourself a favor and learn how schools count before filling out aid forms. Colleges use a formula called “expected family contribution” to determine how much you’ll be able to afford. Learn this formula. In fact, if possible, find out before you begin saving for college so you’ll have funds in the most appropriate spots to qualify for the maximum amount of aid possible.
Apply for Grants, Scholarships and Aid
Finally, you’ll want to focus on a few opportunities where you know you stand a chance of possibly finding funds to help pay college costs. Generally, people don’t just throw money at college programs. There is often something in it for the organization distributing money. By understanding what they want from the student, it’ll be much easier to secure help than by simply thinking that someone is just going to gift your son or daughter a college education.
Schools may want work-study, banks want interest on loans, companies may want a contract for your student’s work. Create a list of grants, scholarships and aid and learn the process of applying for each of these important programs. Many use a form called the FAFSA (Free Application for Federal Student Aid). Read this form ahead of time to learn what questions will be asked.
Hopefully, this will help distill your successful college plan process into bite-sized morsels to attack. Clearly, there are nuances in each of these steps. However, by breaking them down into these pieces, you’ll find that what might have seemed like a Herculean task is really a manageable process that you can navigate if you have a little patience and start right now!
For information on a good 529 plan, read Why I’m a Upromise Fanboy.
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