As the economy struggles to recover, more families are now faced with some critical decisions when it comes to paying for college. Despite the economy, college costs are still on the rise with some elite private schools maxing out at as much as $50,000 per year. Market volatility and along with rising college costs has left many who were once on track with projected shortfalls.
So what can you do if you are the parent of student who is getting close to college age if you haven’t saved enough for college? Here are four strategies to consider:
- Consider a lower cost college. I know this is in the ‘duh’ category but you would be surprised at how many people get hung up on one specific college and never look beyond it. To achieve the desired outcome, research colleges to see if there is a public university or a private one that can provide the same training in your students’ area of interest at a lower cost.
- Apply for scholarships and grants. There are still a lot of scholarship opportunities out there. There are specific sites like FastWeb.com that can help but there are also companies, organizations, and foundations that sponsor scholarships. So do your homework before you give up on this option. Start early (some you can apply for as early as elementary school). And you can often increase your chances by applying to off-the-beaten-path schools instead of the brand names that everyone chooses. One of my friends sent both of her kids to college on scholarships alone – and they graduated debt free from really good schools and had multiple job offers.
- Consider going to a 2-year college. Many students are opting for this and then transferring afterwards to complete their four-year degree. This can dramatically cut your costs.
- Know your loans. Start by visiting FAFSA (www.fafsa.ed.gov) to learn about student aid and apply early. Many students and parents are utilizing Stafford loans and Federal Plus loans, and some parents are even using home equity loans (which I don’t recommend) to fund college. Another resource is FinAid.org. However, before signing on the dotted line for any loan be sure you have read and understand all of the fine print and be on the lookout for scams — if it sounds too good to be true, it probably is. If you feel you need more help in this area, check with a financial planner. Look for planners who specialize in this area because there are lots of options and things to consider. ps!