529 Savings Plans
If you have more than 5 years before your child enters college, now is the time to look into a 529 savings plan. 529 Savings Plans are a wonder when your child goes to college. There are several kinds of 529 plans available. A Pre-Paid College Trust allows you to lock in tuition at today's rate. You will pay the college tuition, and it will cover the cost of tuition when your child goes to school, even if tuition rates rise. But be careful here. Many 529 plans are tied to the stock market. The state of Maryland offers a pre-paid college trust that is backed by a legislative guarantee. Now keep in mind, the Maryland plan only covers tuition for the flagship university for the state. (The University of Maryland). YOU are responsible for any fees above and beyond that point. Other 529 plans allow you to set aside money, and then you use it at your discretion when your child enters college. All 529 plans are investments, so take your time evaluating what is right for your family, and what works best for your financial situation. This really is a great time to sit down and talk with a financial planner.
Community College
These amazing two year institutions are at the cutting edge of saving money. If your child isn't sure what to major in, is short of money, or that they are ready for the rigor of college level course work then your local community college is the answer for you. C.C.'s offer college level course work with smaller class sizes, teachers who have real world experience in their fields, extra help and tutoring, and significantly lower tuition costs. Most CC's offer a 2 year ready for college track, that offers the basic, core required courses that are required by 4 year schools. (Usually in-state schools will allow a one time transfer from a CC into their program with all credits counting. Make sure you research this reciprocity BEFORE you accept an admission offer from a 4 year school.
Another plus to time in the CC is that your child will be living at home. (Okay, maybe that is a minus, and not a plus!) They will not be paying room and board, and most likely, they will be able to find a part-time job to help them cover their expenses and books.
One last note here, many CC's offer scholarships to top students. These scholar programs will cover a portion of the expenses. If you are seriously looking at the CC, look into the programs early. Admission is competitive and the deadlines are also early.
In-State Schools
Everyone has heard of those wonderful, big name private schools. Harvard, Yale, MIT. But, have you looked at the bottom line on the annual tuition at those schools? $40,000+ a year for tuition and fees. With both of our boys, we looked at public and private schools. We took a close look at class size and the overall size of the student body.
I honestly couldn't see where a degree from Princeton would offer any significant advantage over a degree from Maryland or Virginia Tech. But, when you begin looking at out of state tuition rates, in state schools begin to look better and better! At the un-named public school that our sons attend, tuition and fees are less than $20,000/year. The school has a world class reputation, and offers a strong internship program that gets the kids real world experience before they graduate from college.
Scholarships
I remember sitting next to a soccer field when the kids were in first grade, listening to a mother plan out how her sons were going to get soccer scholarships when they went to college. Twelve years later, with thousands of dollars spent on travel soccer, soccer teams, uniforms, and camps, her boys entered college in the fall with partial scholarships - $5,000/ year off of a $40,000/year tuition.
Most schools offer some form of scholarships. Merit Based Scholarships and Athletic Scholarships are offered at a liberal rate at many schools. Private schools offer big scholarships, Public schools offer big scholarships. BUT, all are tied into your student's grade point average. 3.75 is a frequent required GPA, and some are out there for a 3.5 GPA. If you have an athletic scholarship, not only is your money tied into your GPA, the money is tied into your child making the sports team, and remaining on that team.
Our boys were both offered scholarships. When the offers were made, we sat down and figured out what tuition we could afford if they were to lose the scholarships because of a bad grade. We want to think our kids will keep their scholarships, but we need to be prepared for the fact that they might not... so we looked closely at the tuition and fees for all of the schools and had conversations with the boys about which school would best meet their needs, and which one we thought we could afford if they were to lose their scholarships.
(One lesson we've learned is that the scholarship is for a set amount of money. If tuition rises while your kids are in school, YOU will be responsible for the difference between the scholarship and the new tuition rates.)
Co-Op Work or Internships
Wonder of wonder, and miracle of miracles, many employers pay - and pay well - for students who are willing to co-op or intern during college. Not all internships are paid, but all Co-Op experiences are. Co-Op experiences require 5 years for a student to graduate. The student will spend their first year on campus, and then will alternate a semester of classes with a semester of full time work in their field.
Not only are students paid, but many of them will be offered jobs by the companies they worked for upon graduation.
My husband went through the Co-Op Program while he was in college. We can't speak highly enough of the program.
Government Financial Aid
Then, there are those horrid FAFSA forms. Fill them out. It is possible that your child is eligible for some extra money. The school will offer you a package once they review your FAFSA. Many of these offers consist of Student Loans. I would stay away from the loans, if it were me. However, many of these packages offer grants and work-study aid. Work study is wonderful- work on campus and earn money. NO LOANS are involved in work study or grants. It is worth looking into. You are not obligated to take out student loans, but it is worth seeing what else is available.
Final Thoughts
I've mentioned before that I didn't take out loans through college. I was studying to be a teacher, so no co-op positions were available for teachers, and student teaching pays nothing. I was fortunate enough to have a work-study position on campus, where I worked the maximum amount of hours I was allowed to work during the school year. During the summers, I worked in food service. My parents didn't help me with college expenses. My parents were divorced, my Mom was struggling to make her own ends meet, and Dad refused to pay for my expenses because he thought I should join the military, and let the military pay for my degree.
It's not easy, but it shouldn't be. College isn't for everyone. I know some amazing people who don't have a college degree and are thriving with their own businesses. I know a couple of self-made millionaires who never went to college. I personally know teachers, doctors, and university professors who began their college experience at the community college because they wanted to keep their expenses as low as possible. I firmly believe that if you have to earn some (or all) of the money that goes into that college degree, then you will work hard and value that degree all the more. The key is your willingness to work, and work hard.
Many people will enter the work force straight out of high school and earn the money to pay for their degree before they go to school. Others will join the military.
College is a learning experience. Not only learning from coursework, but also learning responsibility in paying for your own expenses, helping to cover your own tuition, and accepting responsibility for your actions. If you can manage to get through a 4 year degree without accumulating thousands of dollars in debt, I believe you have learned a valuable lesson about life.
When you look at the current rate of consumer debt in this country today, I believe that the lessons learned about financial responsibility, paying your own way as you go, and not over-extending yourself to get to your goal is a life lesson that will hold our kids through the rest of their lives.
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