This post is part of a campaign sponsored by ScholarShare, California’s 529 College Savings Plan. It’s the last post in a series of four during College Savings Month.
The question of how to pay for our children’s college education is one that keeps many parents up at night. It’s estimated that the average cost of a 4-year college will range from about $39,000 for an in-state public college to about $74,000 for a private college and $85,000 for an elite college or university by 2020.
One solution is to open a ScholarShare 529 College Savings Plan. The plan – open to anyone, not just parents or California residents – allows someone to create a college savings account that is tax-free as long as the funds are used for the proper educational expenses. There is no annual maintenance fee and the management fees are low compared to other plans.
A college savings plan can be just one piece of the puzzle. When I was in college, I worked, took out student loans and used my credit card (don’t do this!) to pay tuition and expenses. Parents who are planning for their child’s future have many options when looking for ways to help pay for college. Here are a few to think about:
Scholarships –There are many different types of scholarships and they’re not all based on financial need or academic achievement. Scholarships can be awarded to students in military families, students who have survived cancer and who are single moms. Students can apply for scholarships based on a special interest like STEM or sports or because they are the first one their family to attend college. The College Board has a database of $6 billion in scholarships, financial aid and internships from more than 2,200 programs.
Federal Financial Aid – Grants and student loans are types of financial aid. I tried to pay for college on my own, and with my parent’s help, as I went along, but ended up taking out student loans in the last couple of years. Anyone can apply for financial aid and there’s no income limit to receiving it, but families with greater need are more likely to be awarded aid. Federal student loans offer the lowest fixed interest rates and income-based repayment plans. Federal grants are awarded to students that qualify in a few categories – greatest financial need, future teachers who agree to work in low-income schools, and the children of a U.S. service member who died fighting the wars in Iraq or Afghanistan. To learn more about FAFSA check back on Thursday for Sarah’s post about the financial aid application deadline. (Check with the college or university to find out how having a 529 account would affect your ability to get financial aid)
Family – You are not the only one who can help pay for your child’s college. Grandparents and friends can help out by creating or contributing to a ScholarShare 529 account. Families can also ask relatives to think of college expenses when doing their estate planning.
Jobs – I worked my way through high school and college and it taught me so much. It helped to pay for college, but also taught me responsibility and a good work ethic. A student can help save money for college with a part-time job on or off campus.
Community College – Many parents believe that their child has to go to a four-year college right after graduation. But that isn’t the path for many students and it doesn’t mean that they can’t transfer to a university. Starting at community college can save thousands of dollars a year and provide a student the opportunity to figure out exactly what they want to study when they do transfer. Students in the Los Angeles Unified School District planning to graduate in 2017 can apply for free tuition at any of the 7 LAUSD Community College District schools thanks to L.A College Promise, an initiative by LA Mayor Eric Garcetti.
ScholarShare wants to help parents start the savings plan now, during College Savings Month. There are still a few days left to join Sarah and I in taking the College Savings Pledge. If you click over to ScholarShare and take the College Savings Pledge you’ll be entered for a chance to win $500 in College Savings. Five winners are chosen each week in September.
Check out our other posts in the series:
Yvonne Condes is the Editor and co-Founder of MomsLA.com. MomsLA, LLC co-Founders Yvonne Condes and Sarah Auerswald, and their immediate family members, are not eligible to win prizes in the Scholarshare 529 sweepstakes. This post is part of a sponsored campaign. It’s the fourth in a series. Click through to the other articles posted above to read them all.