Maybe the paying-for-college process has changed a lot since your glory days. Or maybe your student will be the first in your family to go to college. Whatever the case, it can be tough to know where to start when it’s time to help your kids pay for college. Try breaking it into steps with this 1-2-3 approach.
According to Sallie Mae's national study, How America Pays for College, families spent $28,026 on college, on average. About one-fifth of these costs (22%) were covered by parent and student savings. However much you’ve saved, it’s important to set clear expectations with your child before that tuition bill comes due.
Yes, your high school senior is busy (and you probably don’t want to burden them with finances), but if you have an honest conversation now, your student will thank you later. It’s important that students understand what their financial choices will mean for them after graduation.
Make sure you’re on the same page about the answers to these questions:
One of the biggest missed opportunities in terms of paying for college is college scholarships, free money for college that your child won’t need to pay back. They’re offered by colleges, towns, states, religious organizations, companies, non-profits, and more. Scholarships can often range from $500 to more than $25,000.
Scholarships have come a long way—they’re not just for straight-A students and athletes. There are opportunities for kids with any skill or interest:
Your child will need to search and apply for scholarships using a tool like Scholly Scholarships. Scholly Scholarships is your new go-to for finding and applying for free money opportunities for school. Best part? You don’t have to register—and you can use filters to narrow down your search based on your background, major, the state you live in, and more.
Pro tip:
Parents who have been through the process say applying for scholarships during senior year of high school almost seems late. Juniors can (and should) apply early and often. Think of scholarships as on ongoing item on your student’s to-do list.
College grants are another free money option for college. The difference with grants is that they’re usually given out based on financial need.
For your student to qualify for grants, your family needs to fill out the FAFSA® (Free Application for Federal Student Aid), a form that determines how much federal financial aid you’re eligible for.
If your family needs to borrow money for college, borrow from the federal government before exploring private student loans. Federal student loans usually have lower interest rates and more flexible repayment options than private student loans.
To qualify for federal student loans, again, your family needs to fill out the FAFSA®. The FAFSA® typically opens October 1.
Gather this info before starting the FAFSA®:
Private student loans are offered through banks, credit unions, and other financial institutions. Work with your child to find the lender that offers the lowest interest rates and loan repayment options that work for you.
When cosigning a private student loan for your child, be sure you can both answer these questions:
Pro tip:
Cosigning a loan is more than just signing a piece of paper. Cosigners are equally responsible for making sure payments are made on time. Missed and late payments could trigger late fees. Plus, late payments might be reported to consumer reporting agencies, impacting your credit score.
By starting early, following the 1-2-3 approach, and having open conversations with your child, you can help them make a great investment in their future.