The numbersare daunting: $20,140 and $40,993 per year. These are the average costs ofcollege for in-state universities and private colleges, according to theCollege Board’s “Trends In College Pricing” for 2010-11.
Multiplythat figure by four and then multiply that number again by the number of kidsyou have. A family with just two college-bound kids is looking at a collegebill between $161,120 and $327,944. The figures are outrageous and gettingworse. Many families are faced with two options:
- Give up. Just throw in the towel. Send your child to community college or simply avoid college altogether.
- Dig deeper into every source imaginable to figure out how to get your children to their dream college – a school that will give them an enormous advantage the rest of their lives.
The largemajority of parents I’ve spoken with over the years have chosen option 2.They’ve been digging deeper and deeper into every college funding sourcepossible. But there are many things you can do to lower the overall costof college. Here are the five best strategies to help pay for collegeduring these challenging times:
College Financing Strategy 1: Need-Based& Merit-Based Financial Aid
What betterway than to have someone else foot the bill, or at least part of the bill? Thebest way to do that is to put yourself in the absolute best position tomaximize the two major sources of free money for college.
For need-basedfinancial aid, you must position your financial assets and income inthe best light. Certain asset classes are not included in the financial aidformula. Complete the appropriate FAFSA forms ontime and correctly. Identify and apply to the collegeswith track records for paying out the best financial aid packages.
For merit-basedfinancial aid, follow these tips to increaseyour child's ACT and SAT test scores. And be sure to search for and pairyour child with the right school. By the right school, I mean the school whereyour child may be viewed as a star, whether it be in academics, athletics,music, etc.
College Financing Strategy #2:Select the Right College
This isperhaps the trickiest one on the list. There are literally thousands ofcolleges to choose from. And the financial and merit-based aid for each schoolis not readily available for parents. It can be found, but it does require someknowledge and experience on where to look. Finding this information iscritical. It is absolutely necessary to know what percentage of need met acollege typically pays out if you want to maximize the free money your childcan get for college.
You'll alsowant to find out what percentage of gift aid each college typically gives infree money, and what percentage is in loans and work-study. Some schools willcover a high percentage of need met, but only a small percentage of the need isfilled with free money, with the rest in loans and work-study. This is not agreat deal. The goal is to find the colleges that not only cover a highpercentage of need met, but also give a high percentage in free money.
College Financing Strategy #3:Explore Work-Study Opportunities
Both kidsand parents share in the cost of college. There is no doubt that you’re goingto put some of your monthly income and current savings towards college costs.So why shouldn’t you have your child do the same? There are numerousadditional benefits to having your child work and pay for college otherthan the obvious. In fact the US Department of Labor did a study that concludedthat college students who work 20 hours or less get better grades (and alsohave a higher chance of graduating).
You mayalso choose to have your child take out loans for college. Student loans oftenhave better terms than parent loans. And you, the parent, can always help yourkids pay those loans back down the road.
College Financing Strategy #4: FileFinancial Aid Award Appeal
Mostparents assume that the initial financial package a college offers them isfinal. Please don’t make this mistake. Colleges are a business. They needstudents to the make the business work. And often times they will work with afamily on getting a better financial and merit award package. But there is aright and wrong way to go about the appeal process.
Step one isto determine if you received a fair offer. You can do this by comparing yourinitial offer with what the school's past track record is for financial aid.
Step two:Use these 6 tips to writea financial aid appeal letter. In addition, you can use a better offer froma competing college to help improve the initial award package.
Don’t beafraid to appeal or negotiate with a college. This is a proven strategy that alot of parents overlook.
College Financing Strategy #5:Reduce Non-Tuition Expenses
Considerhaving your child live off-campus (or live at home if possible). Each of thesecan provide a huge savings on room and board. You can buy college books forless by using sites such as bookrenter.com, chegg.com, or half.com. Each ofthese sites offers textbooks for a fraction of their retail cost. Select a mealplan that allows more flexibility by covering meals for the semester, ratherthan a weekly allotment.
Here is onelast strategy, and it is possibly the most important one: Make a plan and takeaction on it. These strategies won’t work if you don’t put them into play. Ifyou’re strapped for time or unsure of the best way to take advantage of each ofthese cost slashing methods, get help from a qualified professional. They couldpotentially save you a lot of time, headaches, and money.
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About the Author: Scott Weingold, co-founder of College Planning NetworkLLC and publisher of CollegeMadeSimple.com, is one of the nation's leadingauthorities on college financial planning. He was ranked the #1 'CollegeFinancial Aid Expert Worth Knowing About' in the country by CollegeStats.organd is co-author of The Real Secret ToPaying For College. As a sought after speaker, Scott contributes hisexpertise to CNN Money, Smart Money, and Reuters, and gives insider tips to parents directly through hise-letter College Funding Made Simple. For more information and resources, visithttp://www.CollegeMadeSimple.com and http://www.CollegePlanningNet.com. Contact Scott at info@collegeplanningnet.com
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