Every year, nearly 19.5 million students attend college at the undergrad or graduate level. While college is often a formative time in young adult lives, it also comes with a number of financial realities.
While some families think about college funding from early on and start their financial planning, that’s not true for everyone. While you might not find it practical to fund your children’s entire college education, that doesn’t mean you can’t take steps that will make your kids’ college lives easier.
Keep reading for three college funding tips that will work for almost any budget.
1. Start a College Fund
One of the simplest ways you can start college planning on the financial front is by starting a college fund. One popular choice is the 529 college savings plan.
These plans work a lot like retirement plans. You put in after-tax dollars that are then invested in a variety of investment options, such as EFTs and mutual funds.
You can also open a standard savings account at a bank. While you won’t get the growth in the account you might see in a 529 account, it also comes with minimal tax costs. It’s also a good option for allowing others, such as family members, to make contributions.
2. Apply for Scholarships
When the subject of scholarships comes up, most people immediately think of academic and athletic scholarships. For high-performing student-athletes and those with outstanding grades, these are a possibility. They aren’t the only options.
Your kids can often find scholarship options closer to home, such as:
- Local/regional scholarships
- Workplace scholarships
- Activity-based scholarships
- Organization-based scholarships
There are also entire databases dedicated solely to scholarships for college students and prospective college students. Investigate those databases for options and cast a wide net. You never know what you might find or what a student will qualify for when they take a hard look.
3. College Loans
Of course, the to-go college funding solution for most students and families is college loans. The good news on this front is that the government has set up the Free Application for Federal Student Aid system. This system helps students apply for, renew, and manage their college loans during their college years.
Before encouraging your kids to apply for student loans or co-signing on their student loans, have a serious discussion with them. Make sure that they understand exactly what getting those loans means, the kind of interest they’ll pay, and what defaulting can do to their lives.
College Funding and Your Family
College funding can prove a tense subject in many families, particularly low-income families with talented students or student-athletes. While not every family can afford to fully fund college for their kids, you can do things that will help.
Starting a college fund for each kid when they’re young goes a long way, as it gives everyone years to contribute. Encouraging excellence in school and extracurricular activities can open doors to scholarships. If nothing else, your kids can apply for student loans.
Looking for more education tips? Check out the posts in our Career & Education section.
