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As fast as children grow, so does the cost to educate them which has more than tripled in the past 20 years. Whether you have 18 years to prepare or your son or daughter is packing right now, you’ll have to decide how to foot the bill. If you plan on paying for all or part of your child's college education, you’ll need to develop a savings plan as early as possible.
The most common way to finance an education is with student loans. While most student loans do offer attractive repayment options, many students are dismayed when they are still paying for their education 5, 10, or even 20 years after graduation. If this is a situation you and your college-bound child would like to avoid, there is good news: opportunities for funding your child’s education are diverse as the career paths they afford.
There are thousands of private scholarships awarded every year that fall outside of the university’s domain. Private scholarships are not limited to students with perfect grades and packed resumes. Artistic talent, creative writing skills, lineage, interest in a particular field of study or being a member of an underrepresented group can all help you secure a private scholarship. However deadlines can be as early as July, more than a full-year before the student plans to enter college, so scout out and apply for scholarships early.
Section 529 plans are state-sponsored college savings programs. The two major types are Prepaid Tuition Plans, which lock in current tuition rates, and State College Savings Plans, which offer more flexible investing options. Both are useful ways for families to save for their children's college education. If you are planning to use a 529 plan, dedicate a specific dollar amount per month to add to the account. Funds in a 529 plan are taxed at the student’s tax rate, and can be transferred to another individual if they aren’t needed.
Your individual college may be able to offer a short-term installment plan that splits your tuition into equal monthly payments. Many schools also offer their own merit scholarships.
The U.S. Armed Forces offer several programs to provide students with money for school. The most well know is the Montgomery G.I. Bill that provides cash education incentives to encourage students to join and serve a tour of duty.
Finally, don’t forget to enlist the student’s help. Money earned from a part-time job, including work/study jobs can cover incidentals, such as books. Keep an open line of communication with your child as they will not be learning about personal finance at college, but from you.
Need help understanding your student loans? Unsure what programs are available to help you pay back your debt and get your finances in order? MMI now offers student loan counseling. Our trained counselors can help you understand your options and create a plan to get your student loan debt under control. Visit our Student Loan Counseling page for more details.
The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.
Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.
The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.
The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.
The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.