College may seem like it’s still a long way off when your child first starts high school. However, time has a way of flying by, so the sooner you start making college funding plans, the better. Smart financial planning decisions now set the stage for a smooth, stress-free transition later on.
This is the case whether your child is planning a stint at a traditional four-year university or an alternative like community college or trade school. Here’s how you can get a terrific head start on understanding college funds either way, right from day one.
9th Grade: Laying the Foundation
Some parents start the college planning process well before now, but if you haven’t, this is the time to start. Great habits that make a difference start now, and that’s the case for finances, as well as academics.
Establish a savings plan
Now’s the time to establish a smart college savings plan. Look into options like 529 college savings accounts that allow you to grow your funds tax-free for qualified educational purposes. Don’t forget to look into state tax deductions and credits for account contributions, as many states do offer them.
Other options worth looking into include (but may not be limited to) Coverdell education savings funds and custodial accounts. Start early and contribute regularly. Even small contributions add up over time.
Educate on college costs
Now is also the best time to educate your teen on the logistics of college funding. Make sure they understand the true cost of college by discussing factors like room and board, transportation, fees, and books, in addition to tuition.
This helps everyone stay focused, potentially opening the door to scholarships, grants, and other possibilities.
10th Grade: Building Momentum
Sophomore year is all about building on the academic and financial foundation you and your child built together the year before. Here’s what to consider.
Increase savings contributions
If possible, now is the time to step up your education savings strategy and increase your contributions. One smart way to do this is to redirect funds from expenses you might not need to cover anymore (e.g., daycare or extracurricular costs) to your 529 or other target account.
This is also an excellent time to speak with a professional financial advisor about savings, additional college funding options, and so forth. The goal is an accurate estimation of the total cost of college. Online tools – like the net price calculators many schools offer – can be helpful here, as well.
Attend college fairs and workshops
Many communities and schools host college fairs, dedicated planning sessions, and financial aid workshops throughout the year. These can provide incredible opportunities for parents and students alike to learn, ask questions, and familiarize themselves with the entire admissions process.
Encourage your teen to think about the type of college experience they’d like to have. What do they want to study? Would they prefer a large or small school, a rural campus or an urban one?
11th Grade: Strategic Planning
Your child’s junior year is where things really start to pick up speed and take shape. This is also the time to start tackling some of the more concrete aspects of the financial aid process involved.
Complete the FAFSA
The Free Application for Federal Student Aid (FAFSA) is the key to unlocking access to a wide range of college funding options. Examples include grants, low-interest loans, and work-study opportunities. Quite a few schools also use the FAFSA to determine a student’s eligibility for their own aid programs.
The FAFSA opens in October, so mark your calendar each year. It’s also important to apply even if you think your income is too high to qualify.
Research and apply for scholarships
There’s no such thing as “too early” when it comes to applying for potential scholarships. There are numerous awards available for all sorts of achievements, including community service, extracurricular involvement, and personal backgrounds, in addition to traditional academic achievements.
Encourage your teen to cultivate a strong, well-rounded academic profile. Advise them to include extracurricular activities, volunteer work, and leadership roles, as all of these things help make a difference.
12th Grade: Final Preparations
Senior year is the culmination of everything you and your child have been working toward. Make sure you both focus on factors like financial aid offers and careful planning.
Review and compare financial aid packages
Once your teen starts receiving college acceptance and financial award letters, it’s time to carefully compare them. Don’t settle for simply looking at the headline numbers. It’s crucial to also evaluate the balance between loans, scholarships, grants, and work-study options.
Many packages appear generous at first glance but are heavily reliant on loans. And don’t be afraid to appeal aid packages or ask questions, especially if there have been changes to your financial situation.
Discuss student loans and repayment options
Student loans are usually at least part of the package when it comes to college funds, so now is the time to talk to your teen about what borrowing really means. Go over details like interest rates and repayment plans.
Encourage your teen to borrow only what they truly need, as well as to prioritize federal loans over private ones. Terms are typically better, and repayment options are more flexible.
Securing Your Child’s College Future
At the end of the day, planning for college is about more than just saving money. It’s also about reducing stress and creating opportunities throughout all stages of your child’s academic journey. Remember, the sooner you start, the more choices you’ll ultimately have.
Ready to secure your child’s best college future? MyStages® consultants can help you navigate your options. Contact us today for your complimentary consultation!
