I know it seems like just yesterday you brought little Johnny or Jane home from the hospital and now you’re sending them off to college. Besides the emotions you may be feeling about their next big step, you’re thinking about the financial aspect as well. We’ll help you research options so you can send off your college-bound kid and find yourself one step closer to empty-nester paradise (just kidding!).
If you don’t have a 529 account in place already, it may be too late to take advantage of the compounding benefits, but it still could be worth utilizing. If your state offers a tax deduction on contributions, that is a big plus. And the withdrawals from a 529 account are tax free when used for qualifying educational expenses. Opt for a conservative investment allocation as you don’t want to subject your funds to any risk.
Complete a FAFSA
The Free Application for Federal Student Aid, called the FAFSA, determines your student’s eligibility for financial aid. Students can use the form to apply for federal grants, student loans and work study programs.
Scholarships and Grants
Besides federal money applied for through the FAFSA, there are many private and local scholarships available. Employers, community organizations and non-profits often offer scholarships and they are less competitive than those offered at the national level.
Student or Parent Loans
We recommend saving over borrowing, but this is an option many students take. Only borrow what you need and explore different options. Consider borrowing from a nonprofit or state-based organization. These lenders follow a set of strong consumer protections and offer fixed-interest-rate loan options with low or no origination fees.
Many nonprofit loan programs also include borrower benefits such as no prepayment penalties and interest rate reduction options, and some offer benefits for graduates who work in a critical field in the organization's state. Several nonprofit programs also offer income-based repayment options.
Although studies find that getting a job as a student doesn’t pay for a large percentage of college costs, every little bit helps. There are also several companies that will help pay for your college like Starbucks, Home Depot, UPS, and CVS just to name a few.
This is an exciting time for you and your student! Do your research and know your options.
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