How do families without a great deal of financial need manage tuition bills when the time comes? Even when grants and scholarships aren't readily available, there are still many ways for middle-income families to finance a college education.
How to Prepare for Costs Ahead of Time
If your child is still in PreK-12, look into a college savings plan (usually referred to as a "529 savings plan") or a ROTH/Education IRA. The costs and benefits of each plan will differ, as do the amounts you can contribute, so research this type of investment carefully before committing. But your money may do better here than in a traditional savings account.
Also, while your student is still in high-school, encourage him/her to take dual-credit courses (courses for which the student earns both high school and college credit simultaneously) or Advanced Placement (AP) courses. These kinds of courses give the student a head-start on college and can reduce the number of terms/semesters that you'll have to finance.
If your student is proficient in a particular subject, perhaps in another language, you should also encourage your student to take a CLEP exam or pursue credit by examination (CBE). These programs allow the student to earn credit by proving mastery of content related to a specific college course.
What to Do When Enrollment is Just Around the Corner
First and foremost it's very important that parents, regardless of income standing, complete the Free Application for Federal Student Aid (the FAFSA) and actually apply for need-based aid. Why bother, you ask? You'd be surprised at the number of students from middle-income families that would actually qualify for need-based aid if they'd only apply!
The reason these students qualify is that the calculation used to determine the expected family contribution (EFC) takes into account much more than just income. Factors such as the number of people in the household, the number of students in college, the source of the family's income, and savings (or lack thereof) are also taken into account.
So, a family of five with an adjusted gross income of $75,000 with two children in college may have an EFC of $9,000. But, that EFC will be portioned out between the two children in college, increasing the likelihood that those students will qualify for need-based aid.
What happens if you don't qualify for need-based aid? If you don't qualify for need-based aid, you may qualify for unsubsidized educational loans or alternative loans.
What if loans aren't enough? If the student loans aren't sufficient to cover your student's cost of attendance, it's time to look at other resources.
Colleges usually also have competitive scholarship programs where merit is not the number one criteria for students who plan to enroll in specific degree programs or majors. Contact the scholarship office on campus for more information.
It may take time and effort to hunt these opportunities down, but the results may justify the effort. One warning, however, don't pay someone to research these opportunities for you.
What do you do if you exhaust your options and still have a balance? Where there's a will, there's a way. If loans and scholarships don't cover the full cost of attendance, visit the business office on campus to find out if short-term, emergency loans are available to cover immediate costs and then ask for a payment plan. This will at least give you time to pay your student's tuition and fees and other costs, lessening the immediate impact on the family budget.
Also, you may want to encourage your student to take on a part-time job and/or reduce his/her enrollment from full-time to three-quarter time or half-time. Yes, it might take longer for your student to earn his/her degree, but the extra effort will pay off once your student has his/her degree in hand.
Parents should be prepared to work hard and do quite a bit of research to eek out the funds their student needs. No matter how you pay for college/university however, your student's education and future success is well worth the investment.
Until next time!
Lynn Byrne
Preparing for college admissions? Trying to find direction? Need a little help with the planning? Check out my college planning series:
- College Planning Made Easy--the planning and preparation workbook for the take charge, college-bound student,
- Paying for College Made Easy--a college financing guide designed to assist students and families in preparing and planning for higher education expenses; and
- The Great Scholarship Search--my guide for students and parents researching and applying for scholarship funding.
