When you’re in the new parent trenches, sleeping two hours a night and drinking coffee like it’s your job, the only thing on your mind is making it out of this bleary-eyed stage intact. How you’re going to afford college tuition for this precious newborn is your last possible concern.
But before you know it, you’re little non-sleeping wonder is in high school with college – and its tuition – looming around the corner. Before you start to panic about how you’re going to help pay for school, rest easy knowing there are a ton of options to help you get started. Whether you’re reading this while your children are still in diapers, or if they’re steps away from filling out application letters, here are some quick and easy tips that can help you afford college tuition!
1. Search for available scholarships or grants
There are many places online that allow you search for scholarships for free like fastweb.com. It’s important to begin your search as soon as you can because many scholarships have deadlines way in advance of the school year. Your child’s high school counselor should also be able to provide you with a list of scholarships for schools in your area. Remember, you should never have to pay more than the cost of a stamp for scholarship information. If you’re asked to pay a fee for scholarship leads, there is a chance that service is a scam.
As for grants, many different states offer a grant program to help families pay for college. Pennsylvania is one of those states, awarding up to $3,541 per family. You can find out more at collegescholarships.org. The Federal Pell Grant is based on financial need, awarding up to $5,550 per family. To apply for a loan or a grant, you must fill out the federal government’s Free Application for Federal Student Aid (FAFSA), at www.fafsa.ed.gov
2. Check out education savings plans
Education savings plans are commonly called 529 plans. These plans are operated by the state or an educational institution and act as a savings account to use specifically to pay for college. The benefits of a 529 savings plan include: federal and state tax benefits, low maintenance, flexibility, donor controlled, and more. Every state’s plan is different, so it’s best to compare your options. You can visit savingforcollege.com for more information.
3. Explore Tax credits
There are many government programs available to help cover the costs of college. Many of these benefits come in the form of tax credits. The Hope Scholarship and Lifetime Learning tax credit gives you money back on your taxes based upon the amount that was spent on college costs. The Hope Scholarship offers $2,500 federal tax credit per student while the Lifetime Learning Tax Credit offers a credit of up to $2,000.
4. Use a Tuition Installment Plan
Some families may find they can afford to pay for college, but just not all at once. Most colleges offer tuition installment plans that spread out the cost of tuition over 9 to 12 months. Sallie Mae also offers a tuition payment plan as an interest-free way to spread out your payments over the course of several months.
5. Discover additional financial aid options
As with scholarships and grants, the FAFSA is used to apply for federal student aid. It is also required to receive other forms of financial aid that are not need-based (ex: Stafford loan).
Additionally, there are PLUS loans which allow parents with good credit to borrow money to help pay for tuition costs. These loans, like the Stafford loan, are not need-based, and have a adjustable, but low interest rate that will not exceed 9%. Federal Perkins Loans are low-interest loans as well, but they are fixed-rate and based on financial need.
There are also several work-study programs that your child can look into in which the school will provide work hours based on the award amount, class schedule and academic standing.
6. Refinance Your Home
Another viable way to pay for your child’s college tuition is to refinance your mortgage to a lower interest rate. You can use a cash-out refinance to get money from your home’s equity to use however you’d like! Or you can check out the YOURgage, which allows you to set your mortgage terms so that you can pay off your mortgage in time for college tuition payments to start.
Not having the cash on hand to pay in full for a college education should not hamper your child from exploring their options. There are plenty of ways to afford school – you just have to tap into the resources available! For more information online you can check out educationplanner.org or studentaid.ed.gov