For those with younger children, however, now is the time to prepare! You may ask, “At what age should I start saving for my child’s college education?” The answer is… “Now!” It’s never to early to start saving. And, for those parents with high school juniors, if you haven’t started by now, you need to get to work as quickly as possible.
There are several key components to a good college financial plan: need-based aid, merit-based scholarships, saving and investing, and student loans.
- NEED-BASED AID: Awarded to families based on their financial situation. This aid can be awarded by the federal government, state governments, and some colleges and private universities. To apply for federal financial aid, you must complete the FAFSA financial aid form. In addition, for need-based scholarships at the university level, some colleges require a completed CSS Profile.
- MERIT-BASED AID: Can be awarded directly from universities, with or without an additional application, or from private outside scholarships. Scholarships can be awarded for athletics and/or academics. While they are a great way to get free money for college, not everyone qualifies, and the opportunities vary amongst colleges.
- SAVING AND INVESTING: Options can vary greatly. Whether you’re considering the Florida Pre-paid Program, a 529 Savings Plan, some other form of saving or investing, it’s wise to consult a knowledgeable college planner to help guide you.
- LOANS: May be a reasonable way to complete the college budget. Consider utilizing the equity in your home with a Home Equity Line of Credit to fill in financial gaps when needed. And, although many students want to avoid them, student loans are another viable option to help cover the cost of college. Too often, however, students fail to plan properly when utilizing student loans and end up in over their heads. We encourage you to work to develop a realistic budget that takes into account the real cost of college and your ability to repay student loans, rather than relying on student loans as a short-term fix with potentially negative long-term consequences. SUN Credit Union members can take control of college financing with a Smart Option Student Loan by SallieMae.
DON’T WAIT UNTIL IT’S TOO LATE
The choices for financing college are many. Whatever your plan, the earlier you start the more opportunities you will have to save on college. The worst choice, however, is to not plan at all. To learn more, take advantage of our free Financing Higher Education learning module at SUN Credit Union’s Education Station.