As a child approaches college, there are many things that parents should consider. One of the critical areas of concern is what parents should do to ensure themselves and their children are financially ready for college. Below are some of the financial tips to consider when an individual is nearing college.
Financial Checklist to Prepare Your Child for College:
Review your financial aid package.
Once your child has been accepted to college, they will receive a financial aid package that outlines the amount of financial aid they have been awarded. Review the package carefully to make sure you understand what is included. A large determinant in how much financial aid your child may receive is through the FAFSA or Free Application for Federal Student Aid. To estimate your eligibility for federal financial aid, use the Expect Family Contribution Calculator. This tool helps in estimating the student and family contribution towards paying for the cost of higher education. Lastly, ensure you have done your research on the FAFSA requirements and meet the filing deadline which can vary by state. The typical filing deadline for the first FAFSA application is October 1 of your child’s senior year of high school.
Consider taking out student loans.
If your child does not have enough financial aid to cover the cost of college, they may need to take out student loans. Student loans can be a helpful way to pay for college, but it’s important to borrow responsibly. Below is a list of questions you may want to review before you start applying for loans.
- What is the difference between federal and private student loans?
- What options give you the best interest rates?
- Does co-signing the loan give your child better rates and terms?
- What choices do you have when repaying the loan?
Help your child find scholarships and grants.
There are many scholarships and grants available for college students to apply for. Scholarship programs can help students minimize the cost of attendance and allow them to pay off their loans quickly. Do your research and help your child apply for as many scholarships and grants as they can. There is no limit to the number of scholarships a student can apply for. Search locally and nationally, you may find aid for a particular field or trade, for first-generation students, for students of union members or veterans, for students with high test scores, or for those with a family member affected by sickness. The options are endless as long as you do your due diligence and take the time to apply.
Help your child create a budget.
Once your child knows the cost of attending college, they may create a budget to help them stay on course. This will help them track their inflows and outflows, and it will keep them from overspending if they stick to the budget. Many colleges have begun to offer financial coaches on campus who can walk your child through the budgeting process and assist with their financial needs and questions.
Talk to your child about financial responsibility.
It’s important to talk to your child about financial responsibility before they go to college. Help them understand the importance of budgeting, saving, and managing debt.
Encourage your child to work part-time.
Working part-time can help your child earn money to pay for college expenses. It can also help them gain valuable work experience.
Be prepared to help your child with unexpected expenses.
Things don’t always go according to plan, and your child may have unexpected expenses while they are in college. Be prepared to help them with these expenses, if needed.
Ensuring that your child is financially ready for college can be a daunting task. If you take the time to break it into simple steps like the ones listed above, that daunting task often becomes much more manageable. While the list above is not all-encompassing, it should provide some ideas as to where to start your planning. Please feel free to reach out to our experienced team at Voisard Asset Management Group with any questions you may have. As always, we stand ready to assist.