What to do now to be ready to pay for college
Sponsored by Upromise
The cost of college and student debt has been in the news a lot lately. As the cost of college has gone up, more graduates find themselves with serious student debt. If you’re a parent, the message is clear – now is the time to start or accelerate your savings.
The good news is whether your kids are in high school or you’re an expectant new parent, it’s never too late to start planning and saving for your child’s college education. And it’s never been more important, because 701 of jobs will require a college degree or some post-secondary education.
Upromise, the leading college savings rewards program, believes strongly that planning for how to pay for college, as well as setting up a consistent savings plan, is important for all families. To get started, the resources below will help you learn how to prepare and how to find the resources you need.
7 Resources to Prepare for College Tuition
The first step in planning to pay for a college education is completing the FAFSA form. FAFSA, or the Free Application for Federal Student Aid is necessary to obtain federal student aid, including grants and loans with lower interest rates. The FAFSA process can also help you gather and prepare financial and education documents that can be used for applications, scholarships, grants, and loans.
- Everything you need to know about federal student aid can be found at the Student Aid website, including loan calculators and instructions for applying for financial aid.
- For specific tips about how to fill out the FAFSA from, see this step-by-step guide. It’s also important to know that you will have to update your FAFSA information every year.
There’s more than one way to pay for college
There are many ways to pay for college, and the resources you use will depend on your situation and needs. Often, a combination of savings, grants, and loans are part of the equation. NerdWallet’s How to Pay for College: 8 Expert-Approved Tips is a great place to start. NerdWallet lays out the multiple options for saving, securing grants, or getting the loans your student needs. It’s a good roadmap for making sure you’re looking at every option and not leaving money on the table.
When applying for college, many students and parents think they’ll have to rely on their savings and college loans alone. They may assume they don’t qualify for scholarships or grants because of grades, finances or something else. The reality is there are a variety of merit-based and other scholarships that can help pay for higher education, and of course, scholarships don’t need to be paid back. Get started with Best Colleges Top 12 Resources for finding scholarships. You’ll still have to do the research, but at least you’ll be looking in the right places.
529 Plans – the loans made for college savings
Just like any kind of savings plan, the idea is to have your money grow over time. And while there are many ways you can save, 529 plans may be the most advantageous option. A 529 college savings plan is a state-sponsored investment account that helps families save for higher education expenses.
Savings in these accounts can grow tax free and withdrawals are tax free when used toward qualified educational expenses. To get the most value, the best practice is to make regular contributions to tax-free 529 college savings plans as well as compound savings over time.
- Upromise has compiled an infographic of 10 Things Parents Should Know About College Savings and 529 plans.
- You can also learn more with their 529 Guide which provides a detailed outline of what they are and how they work here.
When student loans are necessary
Ultimately, you may still supplement savings and other funds with student loans to pay for part of a college education. But which is the best for you and how can you make sure you get the most money without putting yourself in a financial hole later?
With the array of loan options from a wide variety of vendors, a great place to start is the federal government’s Consumer Financial Protection Bureau. They’ve compiled a resource to help you choose a loan that’s right for you, including types of loans, where and how to shop for loans, and what to avoid.
No matter what combination of resources you use to pay for college, the first step is to get started. Just like school, a little homework goes a long way to success. And when it comes to savings, Upromise is proud to help you save for your child’s future with an account that earns you cash back on dining, travel, and retail purchases, deposited directly to your 529 account. Get started with a $30 welcome bonus when you sign up for a free account.
- Get started by learning about how to complete your FAFSA form.
- See Nerdwallet’s 8 Expert-Approved Tips on how to fund your education.
- Discover 12 resources to find and earn college scholarships from Best Colleges.
- Get a rundown of 529 plans from Upromise.
- And review the 529 Plan Guide.
- Learn more about choosing a student loan from the Consumer Financial Protection Bureau.
Good luck with your family’s college journey!
1 – Georgetown University Center on Education and Workforce study