Summer is winding down, and the kids are back-to-school. When children are young, logistics for the new academic year may involve little more than a trip to buy school supplies. But to send kids (or grandkids) to college someday, be prepared to plan far ahead to meet the financial demands. And, as part of that planning, be on the lookout for all opportunities to help pay those sizable college bills.
Specifically, be ready to take action in these areas:
Financial aid – Start thinking about financial aid at least a year before a child heads off to college. For example, begin submitting the Free Application for Federal Student Aid (FAFSA) on Oct. 1, 2019, for the 2020-21 academic year. And if the past is any guide, always remember that Oct. 1 date for the next school year. The FAFSA helps colleges and the U.S. Department of Education evaluate a student's financial need and determine how much financial support a child requires. And since much financial aid is awarded on a first-come, first-served basis, it’s a good idea to submit the forms as soon as possible once the application period opens.
Scholarships – Colleges and universities offer their own scholarships, but you’re not limited to them. In fact, you might be surprised at the number and variety of college scholarships available for a child or grandchild—but to find them, you may need to do some digging. Find out what’s offered from foundations, religious, ethnic or community organizations, local businesses and civic groups. Also, ask the high school guidance office for information. Your own employer might even offer small scholarships. You can find more information on scholarships on the U.S. Department of Education’s website.
College-specific investments – Consider an investment designed to help you save for college. You have several options available, each with different contribution limits, rules and tax treatments, so you’ll want to consult with a financial professional to choose an investment that’s appropriate for your situation.
Community colleges – Not every bachelor’s degree needs to begin and end at an expensive four-year college or university. Many students now fulfill some of their “general” education requirements at affordable community colleges before transferring to a four-year school—often saving thousands of dollars in the process.
Paying for college is challenging. After all, for the 2018-19 academic year, the average annual cost (tuition, fees, and room and board) was $21,370 for in-state students at public four-year colleges or universities; for four-year private schools, the corresponding expense was $48,510, according to the College Board. And college costs will likely continue to rise over the next several years. But by being proactive and having a plan in place, you can go a long way toward coping with these expenses and helping a loved one enjoy the benefits of higher education.
This article was written by Edward Jones for use by Mark Hornok, an Edward Jones Financial Advisor in Barrington. Call 847.382.3476 or visit EdwardJones.com.