College Planning: Lower Your Out-of-Pocket College Costs

Part One

What should you do when the school year is finally over? If you’re thinking that this is the time to kick back, relax and enjoy the time you have left before your child starts college then… you’re going to have to think again. It’s true that the deadlines are behind you and the form-filling is done, but what you do this summer can still have a strong effect on your child’s college expenses.

This report has two parts. First, I’m going to talk directly to parents of seniors who will be starting college in the fall; second, I’m going to explain how parents of juniors can already start preparing for their children's college expenses.

5 Tips for Parents of Seniors

1. Get Your Child Working This Summer

Obviously, if your child can earn some money to put towards his or her own college expenses, that’s going to make life easier for you and mean more independence for him or her.

Your child can earn around $3,500 per year without affecting their aid package. If they can find a summer job and squirrel away money for the upcoming year, it will be a great help for you and a great habit for your child to develop.

2. Give Your Child a Spending Allowance

You should have a pretty good idea how much you’ll need to spend next year on tuition, room, board and everything else. (If you’re not sure how you’re going to handle all those expenses, contact us. We can show you some very useful financial strategies that could help you pay for college on a "tax-favored" basis without sacrificing your retirement, your savings or your standard of living.)

Now is the time to decide how much spending money you’re going to give your child throughout the year. After all, it’s not just classes and housing you’re going to have to pay for; you’re also going to have to finance books, transportation, social life and all sorts of other things. If you decide to give your child a credit card to meet these expenses, you need to set limits and determine what they can use the card for: is the card just for

emergencies or is it also for parties and Spring Break tickets? You also want to find a way to make sure that their spending stays on track so that you don’t get hit by a giant bill at the end of the month.

Bear in mind that many schools offer "bridge loans" specifically for student emergencies. They would usually have 90 days to repay the money and that can be a good substitute for an emergency credit card.

3. Find "Last Minute" Methods To Meet Your EFC

There’s often a big gap between the amount that parents think they can pay and their Expected Family Contribution (EFC). If you’re still scratching your head and wondering how you’re going to meet these expenses, we offer a 100% money back guarantee, if you are not completely satisfied, you pay us nothing— there’s no way you can lose. You do have options and some smart planning now is the only way to make the most of the resources you have available.

4. Remember That Applying For Financial Aid Is an Annual Process

When your child is attending college, you’ll still have to fill out the Free Application For Federal Student Aid (FAFSA) and possibly a CSS Financial Aid Profile at the beginning of each academic year. Deadlines still apply, don’t get careless now.

5. Learn From Your Mistakes

While re-applying every year can be a real nuisance, it also means that if you missed a deadline or made some other mistake you only have to live with the consequences for one year. If you can learn your lesson, you can improve the process before the beginning of next year and better your position.

In Part two we will explain how parents of juniors can start preparing for their children's college expenses.