Besides retirement, saving for your children’s college expenses and tuitions tend to drain out bank accounts in most families. With the increasingly higher tuition costs which are rising at a rate faster than inflation, it is becoming more difficult for families to save for college costs. Many of you may be wondering what is the best way to go about paying for college. The truth is, like everything else in life, it pays to start planning early.
· FASFA: As your child goes through and applies to colleges, make sure to fill out the Free Application for Federal Student Aid or FASFA form. Based on this form the government will be able to determine your financial need for that specific child. Filling out a FASFA requires the use of your W-2 forms, bank statements and mortgage and insurance forms. Also, if your FASFA estimate for need isn’t has high as you expected, don’t be afraid to appeal it.
· Loans: Although many feel that taking out loans is risky in terms of finding ways to pay them back, they also serve as a way to make paying for college feasible. Look into both Stafford and PLUS loans to determine the best way to make up the difference when it comes to paying for your children.
· Scholarships: Make sure that your kids are doing their part too! Private scholarships serve as a great way to pool in extra money for college needs. Even the smallest bit counts!
· Section 529 Plans: Look into your states Section 529 plans for an easy and relatively cheap way to save for college. The plans usually provide you with tax benefits while you have a guaranteed way for saving for tuition. And the money does not necessarily have to be used at an in-state college!
There’s no time like now to start saving for your children’s education. The earlier you start, the easier paying for college will be!