With each passing year, colleges around the country are increasing the amount they charge as tuition, making it increasingly difficult for parents to collect the funds necessary to put their children through college. According to statistics, the average amount which was spent by parents to pay for college this past year amounted to around $26K.
Reportedly 43% of this amount was funded by savings, while 31% was covered thanks to the generous scholarships provided by colleges across the country, 24% was borrowed by students to pay off at a later stage, and the rest of the 2% came from friends and extended family members.
This trend exists because, for many parents, it is only possible to partially fund college education, and they place the burden of funding the rest of it on their child which he or she can fulfill either by securing a scholarship or by borrowing, with many students ending up with huge student loans that they have to pay off for many years after they graduate.
That is why it is always wise to keep the following strategies in mind while planning on funding your child’s college tuition.
Keep In Mind All Of Your Priorities
Keep in mind that the more you invest in your child’s college education, the more you take away from your own retirement fund which is also equally, if not more, important for you.
Your child has many options to choose from which can help in covering college tuition, but you don’t have the same privilege once you reach the age of retirement. That is why make sure to keep your retirement fund intact and create another fund for college tuition if your income allows for it.
Keep one thing in mind: the sooner you begin to save, the more you are going to have when the time comes to make those fee deposits.
There are many savings tools which you can follow, such as the 529 Savings Plan, which is tailored to fulfilling college funding requirements in a systematic manner while protecting your other interests such as an emergency fund as well as enough savings to keep for your retirement.
Also, make sure you invest in a way that your return increases in an exponential manner, as that is how you can ensure an adequate return to fulfill all of your expenditure. There are many tools available online that can help you assess returns and also tell you exactly how much you need to contribute on a monthly basis.
Explore Options Provided By The Government
The government also provides many opportunities aimed at easing the financial burden of families across the country, with federal aid and loans. You need to fill out the FASFA even if you don’t think you are eligible for aid, as you might be eligible and hence qualify to receive aid from the government.
Also, there are many loan options available with the government that may allow you to borrow the funds on behalf of your child, which you can pay off in easy installments.