- Understand the various financial aid formulas. Parents must know the difference between FAFSA, Profile, and Consensus.
- Consider a state 529 savings plan. Families who can find a cheap plan and get a state income tax deduction will come out ahead.
- Plan in advance to make the most of your federal tax credits and deductions.
- Make the most of merit-based aid. This may mean that your child is not able to attend a top tier school, but that's okay.
- Don't discount European degrees. European degrees have more government support and lower operating costs and are often shorter than American degrees.
- Consider the transfer tactic. For example, a child can attend a community college for two years before transferring to a four-year school.
- Time contributions from grandparents and other family members appropriately. This money should be given on a yearly basis after a bill has been sent from a university or it should be given after a degree has been completed in order to pay off student loans.
- Think about how to knock a year off of a degree. For example, some students load up on AP classes in high school to cut a year of college.
- Look into income-based repayment.
- Consider in-state tuition. In the state, tuition will almost always be cheaper than out of state or private tuition.
- Will your child qualify for an academic discount? Many university employees get significant discounts if their children attend that institution.
Top 12 Ways to Save for College
Are you the parent of a college-bound child? Regardless of the age of the child, you should be considering how you and your family will finance this degree. The difference between planning now and waiting until the last minute can be worth anywhere between $10,000 and $200,000. The following 12 steps will help you start building the college savings that your child needs.
Category: Financial Planning
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