A college education can open doors for many that would not otherwise be available. Most parents put a college education at the top of their wish list when it comes to things they want for their children. But higher education is not without cost and funding that college education can be quite challenging.
Options for College Funding
There are many options to consider for funding a college education. Scholarships, grants, financial aid and savings are all viable options. According to the College Board, “There is more than $143 billion in financial aid available”. Qualifying for financial aid is relatively easy and the amount of income made by the student or parents will determine the type of aid received.
According to the College Board, “about 56 percent of students at four-year schools pay less than $9,000 for tuition and fees… After grants are taken into consideration, the net price the average undergraduate pays for a college education is significantly lower than the published tuition and fees”. The good news is that there are many options out there.
Saving for College
It may be difficult to do, but the best time to start a college savings account is when a child is young. Start with any amount; even if it’s small. The idea is just to start putting money away or investing early, so there is plenty of time to save.
College savings plans and pre-paid tuition plans are both forms of 529 plans. A 529 college savings plan allows parents, or others, to save for a child’s education in the same way that a 401k allows savings for retirement. This type of plan offers tax benefits and there are different ways the money can be spent. Another benefit is that the beneficiary can change, so if one child does not use all of the funds saved, a sibling can use the remaining funds.
A 529 pre-paid tuition plan allows parents to pay for a child to attend college years from now at today’s cost. The fact is that college costs are rising and will continue to rise. So locking in prices at today’s rates may prove quite attractive for many. This type of plan is limited to participating schools and generally only offered for state schools.
Financial Aid for Higher Education
The federal government and colleges fund most financial aid programs. Aid can come in the form of scholarships, grants, work/study programs and loans. “Over half of the students currently enrolled in college receive some sort of financial aid to help pay college costs,” according to the College Board. Financial aid can be needs based or merit based.
The bottom line is that college can be affordable and those who want to attend college should be able to. There is help available to those families who need or want it. Parents and students who do their research about financial aid assistance will be surprised at how many options there are to help fund higher education.
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