Now that summer is winding down, and it’s “back-to-school” time. When children are young, logistics for the new academic year may involve little more than a trip to buy school supplies. But those who would like to send kids (or grandkids) to college someday need to plan far ahead to meet the financial demands. And, as part of college planning, be on the lookout for all opportunities to help pay those sizable college bills.
Specifically, be ready to take action in some key 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 on Oct. 1 for the 2020-21 academic year. And if the past is any guide, remember that Oct. 1 date for the next school year. The FAFSA helps colleges and the U.S. Department of Education evaluate financial need and determine how much financial support your child requires. And since a lot of financial aid is awarded on a first-come, first-served basis, it’s a good idea to submit forms as soon as possible once the application period opens.
Scholarships
Colleges and universities offer their own scholarships, but applicants not limited to them. In fact, it might be surprising to learn the number and variety of college scholarships available to a child or grandchild – but to find them, some digging may be required. 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. An employer might even offer small scholarships. Find more information about scholarships on the U.S. Department of Education’s website.
College-specific investments
Consider an investment designed to help save for college. Several options are available, each with different contribution limits, rules and tax treatments, so consult with a financial professional to choose an investment that’s appropriate for individual situations.
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 tens of thousands of dollars in the process.
Paying for college is challenging. After all, for the 2018-19 academic year, the average annual cost including 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, as we’ve seen, by being proactive and having a plan in place, prospective college students and their families can go a long way toward coping with these expenses and helping loved ones enjoy the benefits of higher education.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
