How to Pay for College Without Significant Savings
The good news is that your child can still go to college, still have unlimited potential and you can keep your finances in order….if you follow a few key guidelines.
1) Establish a budget (total cost for attending a school) that you can afford
We know what you’re going to say. Everyone says it. “My child really wants/needs to go to an expensive school.” The data would suggest otherwise. Over the last 20 years, numerous studies have shown that the specific college a student attends does little to create future economic success. It’s your student that creates their own future. This is especially true in technical fields (science, medicine, engineering, computer programing etc.) where the skills, not the network of the school, are most important. Paying out of pocket, or worse, borrowing, to attend a school is highly unlikely to produce an outcome different than if your child attended a less expensive school. It is not “money well spent.” Don’t believe us? Check out the work from leading economists here. Further, if you and your child borrow beyond your means to pay for college, your family’s economic future is guaranteed to be saddled with debt. That outcome will be certain. The best thing you can do for your child is to help them make a prudent choice about college. Look at your income, any savings, and your child’s income to work out a realistic budget. This is also a great opportunity to push your child to seek scholarships, start at a local community college for 2 years or consider working part-time while they attend school.
2) Complete the FAFSA (Free Application for Federal Student Aid)
Your income may be too high to qualify for Federal Pell Grants ($60,000). However, most schools use the FAFSA output to award scholarships. Some scholarships even require both academic merit and financial need. Also keep in mind that in non-traditional households, the parent that the student lives with is the parent filling out the FAFSA. That can materially impact income and scholarship awards.
3) Apply early
Schools have limited scholarship and financial aid budgets. As the admissions rounds go later and later into the school year, the available resource pool dwindles. There is no reason not to apply early to ensure you have the best shot at receiving financial aid.
4) Talk to someone
The college financial aid process is confusing. For most families, college is the second largest expense behind purchasing a home. Don’t try to navigate the complexity alone! If you are stuck and don’t know where to turn, schedule a call with us and we can help.