College may seem far away (even for seniors) but it will be here before you know it. In no time at all, you’ll be helping your child settle in at their new school, and signing your first tuition check. You should begin preparing now, even if your child is in ninth grade.
For parents of seniors, you should be familiar with the schools in which your student plans apply. We suggest having a strong mix of safety schools, reach schools and other colleges you know your student will flourish. For all other parents, you should really start by understanding your financial fit and learning strategies to find the best colleges for your budget.
We’ve discussed Expected Family Contribution (EFC) and if you are unfamiliar with this term, you should start here. This post will cover a few recommended hints all families can implement to start saving before tuition kicks in.
Get 5 Hints for Parents with College-Bound Students…
1. Encourage your child to work during the summer
Obviously, if your child can earn some money to put towards their own college expenses, that’s going to make life easier for you and mean more independence for your future college student. Getting them to have “skin in the game” has tremendous impact on valuing their own education.
Your child can earn up to $4,350 per year without affecting their aid package. If you are small business owner, and can afford to have your child work for you, there are many tax strategies that get missed during the process. We have seen an additional $10,000 of college savings for small business owners.
2. Know before you go
If you don’t have a good idea of how how much you’ll need to spend next year on tuition, room, board and everything else for four years, you need to start planning. If your family is unsure of how you’re going to handle those expenses, our experienced advising team would be more than happy to provide advice. You may find our six-step plan for building a college plan helpful.
With 4,000 colleges to choose from, you can find that “unicorn college” for you student. What’s a unicorn college? It’s one that fits your student academically and socially and your family financially. What does financial fit mean? For us, it starts with a three-step process. Download our free guide a new approach to college planning or read: Free Money for College.
3. Find methods to meet your EFC and build a four-year blueprint
There’s often a big gap between the amount that parents think they can pay and their EFC. You do have options—some smart planning is the only way to make the most of the resources you have available. Meeting with a college planning advisor can open possibilities your family wasn’t even aware of. Take advantage of the small, and personalized strategies to lower your EFC.
Even if you have already applied to schools, you still have time to build a four-year funding blueprint allowing you to save time, frustration and money. After almost a decade, we have seen a big mistake on initial college funding plans. First, parents pick a school without knowing before you go and may get themselves into trouble borrowing using the wrong type of loans.
Don’t forget: College costs will continue to rise at most schools and a strategic four-year plan will eliminate a lot of potentially damaging mistakes.
4. Remember: applying for financial aid is an annual process
If you have four years of filing, we recommend you really understand the benefits of applying each year. 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. Many folks give up on trying to save because they think they are too late. All schools use what they call “prior-prior” tax year to calculate your current EFC but this provides opportunities. If you start early enough, you can potentially maximize your situation for all four years of college. Many already on their way to school have tons of potential opportunities to save in the future years.
You might be able to set yourself up for more aid in future years even if you didn’t receive any money your student’s first year.
5. Learn from your mistakes or learn from others
My father told me there are two ways to learn mistakes in life: the “hard way” or the “free way” from others who had already made them. For almost a decade, we have seen many parents make big mistakes and miss opportunities to save money and most importantly find the best colleges for their students. Some the of the biggest mistakes (see next week’s blog for more detail):
- Not having a four year funding plan before they applied t0 colleges
- Lowering the EFC when it didn’t matter and NOT lowering it when it did
- Missing key deadlines by starting too late
- Applying Early Decision instead of Early Action
- Using the wrong types of loans to fund college
- Underestimating the “social fit” in the college selection process
- Thinking the process is the same as when you were in college
- Missing tax strategies that could save between $10,000 to $240,000
We would love to guide you through college admissions, college financial aid and or college financial planning process. There is rarely someone we couldn’t have helped in some way. Schedule a complimentary 30 minute chat to make sure you are on the right path.