“If you’re the parent of a high school student you may soon be faced with a very tough decision,” says Hill. “Should you continue funding your retirement plan, or help pay for your child’s college education?”
If you’re the parent of a college freshman, you’re looking at at least three years of tuition and book costs. Read College Cost Cutting Tips: Get Your Degree Quicker And Cheaper Than You Ever Thought Possible for more financial help.
And, here are three tips for cutting college education costs and saving for retirement.
Tips for Cutting College Costs – Parents of College Students
Parents who need help paying for college tuition often turn to the financial aid system. While you may be uncertain about prioritizing retirement contributions versus college expenses, the financial aid system is quite clear about how they view your retirement contributions. According to “the system”, money contributions can be used to help pay for your child’s education, and you can play “catch up” with your retirement at a later point.
Here are three ways to shave your out-of-pocket college expenses and keep your retirement contributions flowing….and help your child be successful at college!
1. Understand Financial Aid at College
Understanding how each college packages financial aid is an essential part of receiving the “best” financial aid package. Many universities are required to include a minimum amount of self-help aid before any grant or gifted (free) money is awarded. Self-help aid includes interest-subsidized or unsubsidized loans and work study programs that must be repaid through financial obligation or service to the school or state.
So, what’s the best strategy for cutting college costs? Applying to schools that historically award a higher percentage of grants or gifted money and a lower “self-help level” can stretch your educational dollars.
2. Understand the “Ideal Student”
To cut college costs, apply to schools that are “looking” for your student. Post-secondary institutions attempt to meet enrollment goals by giving better financial aid packages to students that they feel offer the “best fit” for their school. Understanding what your selected institutions are looking for and matching your needs to theirs, can improve your chances of receiving a generous student loan package.
A good starting point would be to apply to schools where your child academically is in the top 15-25% (SAT, ACT, Subject Tests, G.P.A) of the incoming freshman class. This information can be found by doing a word search on the prospective school’s website for the phrase, “Freshman Class Profile.”
And if your child is a good “match,” never underestimate the power of a phone call. Establishing relationships with alumni, admissions, financial aid and academic personnel prior to formal application can go a long way in reducing out of pocket expenses.
3. Apply to College Early, Think About Scholarships
Colleges are often under pressure to meet early deadlines for enrollment goals. To help meet their goals, some institutions will award merit scholarships to students who apply early in their senior year. This is one of the easiest ways to cut college costs. So, get busy filling out college applications as soon as your child starts his or her senior year!
If you’re worried about your child at college, read Sending Your Kid to College – Tips for Survival for Parents of College Students.
If you have any questions, comments, or tips for cutting college costs – please share below!
Marc R. Hill, a financial planner by training, is a publisher and coach who helps families discover ways to dramatically cut college costs while protecting retirement accounts. Visit him at ReduceMyCollegeCosts.com.