|
Decide if
you're saving for public or private college.
|
|
|
Get the
current average annual cost of private versus public school.
|
|
|
Determine
what college will cost when your child is ready to attend.
|
|
|
|
Set up a
timeline for saving:
|
|
|
Determine how
long you have before you need to shell out cash for tuition.
|
|
|
Figure out
how much you have already saved and how much you still need to put away to
meet that objective.
|
|
|
If you don't
have one already, establish an investment philosophy and determine a
financial strategy that works for your family.
|
|
|
Consider
hiring a professional financial advisor.
|
|
|
|
When
college is more than 15 years away:
|
|
|
Consider
opening an Education IRA.
|
|
|
Consider
setting up a custodial account for minors.
|
|
|
Think about
investing in aggressive mutual funds.
|
|
|
|
When
college is ten to fifteen years away:
|
|
|
Look into
prepaid tuition plans.
|
|
|
Look into
state-sponsored college savings plans.
|
|
|
Begin to
stabilize your financial portfolio.
|
|
|
|
When
college is five to ten years away:
|
|
|
Move a
portion of your investments into fixed income or bonds.
|
|
|
|
When
college is five years or less away:
|
|
|
Move your
child's college money into more conservative investments.
|
|
|
|
When it's
college time--tax breaks:
|
|
|
Look into the
Hope Credit.
|
|
|
Look into the
Lifetime Learning Credit.
|
|
The Hope
Credit and The Lifetime Learning Credit are mutually exclusive. Parents must
choose one or the other for each student; they both can't be claimed at the
same time.
|
|
|
See if you
qualify to take a tax deduction on the interest paid on your child's student
loan.
|
|
|
Consider
withdrawing funds early from your traditional or Roth IRA and taking a
penalty waiver.
|
|
|
|
When it's
college time--parent loan:
|
|
|
Look into the
federal Parent Loan for Undergraduate Students (PLUS).
|
|
|
|
When it's
college time--financial aid:
The main types of
financial aid are loans, grants and scholarships, and work/study programs.
The majority of financial aid comes through the U.S. Department of
Education—nearly 70 percent of all money given—mostly in the form of loans.
The rest comes from a combination of federal or state grants and programs,
from the universities themselves, and from corporations, foundations,
professional and service organizations, and community groups.
|
|
|
Fill out the
Free Application for Federal Student Aid (FAFSA) form.
|
|
|
ClubMom's
checklist Helping Your High Schooler Find the Right College has helpful
financial aid information.
|
|
|
|
When it's
college time--student loans:
|
|
|
If your child
qualifies for a Federal Stafford Loan (which gives students a break on loan
interest payments), factor this into your financial planning.
|
|
|
If your child
qualifies for a Perkins Loan, factor this into your financial planning.
|
|
|
|
When it's
college time--grants and scholarships:
|
|
|
If your
student qualifies for a Federal Pell Grant, factor this into your financial
planning.
|
|
|
If your
student qualifies for a Federal Supplemental Educational Opportunity Grant (FSEOG),
factor this into your financial planning.
|
|
|
Look into the
Leveraging Education Assistance Partnership (LEAP) program.
|
|
|
Find out
about money available directly from the college and universities to which
your child is applying.
|
|
|
Find out
about special interest groups and organizations that supply cash for
college.
|
|
|
Beware of
scholarship search firms that promise you scholarship money for a fee.
|
|
|
|
Work/study
programs:
|
|
|
If your child
qualifies for a work/study program, factor this into your financial
planning.
|
|
|
|
Alternative
approaches to financial aid:
|
|
|
Consider
reducing the cost of college by having your child start out at a community
college.
|
|
|
Consider
having your child apply for a four-year U.S. Army ROTC scholarship.
|
|
|
|
After
buying a house, paying for a child's college education is the biggest
expense most parents face. Check out this information-packed checklist to
figure out how much it'll cost, where to save depending on your child's age,
and more. Register
with ClubMom to customize this checklist by assigning due dates, adding
new tasks, scheduling email reminders, and more.