It should come as little surprise that college tuition costs are incredibly high and that, over the past couple decades, they have risen far faster than the rate of inflation. For the average family – and even for the more economically-secure one – paying for college is a tremendous and considerable investment, one that cannot be adequately done without years of planning and foresight. According to estimations, the cost of raising a child from the age of birth to 18 can be doubled in some cases when college costs are included.
Faced with these costs, most families choose not to pay for their child’s post-secondary education, instead working to provide assistance and support as their son or daughter amasses student debt and then works to pay off their loans. For many families this approach is the far more practical and feasible one. Others, however, take a stop-gap approach to college costs, meaning that they don’t plan adequately and must resort to selling the family jewels and amethyst rings to cover tuition when the time arrives.
If you have college-bound kids, and if you are planning to be the primary contributor to their tuition costs, there are practical means for saving money towards college and for reducing the bill. Here, then, are some tips that every parent in this situation should keep in mind:
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Start Saving At Birth
On a long-term basis, planning for college should be similar to saving for retirement. On that note, you’re going to want to have a college savings fund for your child into which you put regular contributions. This fund should be opened at birth and closely watched and maintained, just as you would a retirement account. Furthermore, by putting the money into an account specifically set aside for college, you can avoid paying taxes on much of the money and realize higher rates of interest.
Even if you plan to pay the majority of college costs, your child should still contribute towards the effort. During high school, perhaps, the money earned from your kid’s summer jobs could go into the fund. Once they arrive at college, you may want to have them explore a work study program that helps reduce their tuition. The actually approach is one that you should determine as a parent and discuss as a family, but the bottom line is that it’s important for your child to be involved in the process – and to contribute towards it.
Pick Cost-Cutting Payment Plans
Most colleges and universities offer several different payment plans for tuition, and most of these include plans where your overall costs are lower if you pre-pay for each semester in installments. There is no reason not to do such a plan; after all, if you have the ability to pay for your child’s college education, you have nothing to gain from postponing the payments and taking on debt.
Get The Tax Rebates
The federal government offers rebates and other tax incentives for costs relating to a college education. While these sometimes vary from year to year, the vast cost of college means that the tax savings can be considerable.
There are certainly other methods and tricks for saving for college and for reducing the costs once your child has enrolled. But the ones listed above should be some of the most helpful and important ones to use if you’re a parent. Saving and paying for college is a mammoth undertaking, so it’s always best to be prepared.