Paying for College: Start Saving Now

09 January 2019

If you're like most parents, the thought of financing your child's college education is a daunting prospect. According to U.S. News & World Report, in 2018 the average cost of tuition and fees at a public college was $9,716 for in-state students and $21,629 for non-residents. Undergraduates at private colleges paid an average of $35, 676, with many private colleges costing well over $50,000 per year. While the figures are intimidating, there are ways to ease the burden of college costs. Whether you are the parent of a newborn or a college-bound teen, plan ahead and consider a few of these helpful tips:

1. Start Saving ASAP

Stroller, car seat…and a college savings plan! It's never too early to start saving for your child's education. Urge grandparents to think college savings when gifting for birthdays, graduations and other special events. Encourage younger children to regularly deposit a portion of their allowance and gift money into a savings account. Bonus: it's an easy way to teach financial responsibility. Likewise, older teens can invest in their own future with a part-time job and routine savings.

2. 529 Plans

Consider opening a 529 Plan, again, the earlier the better. 529 Plans (named after a section of the Internal Revenue Code) are state-run college savings plans with numerous tax advantages. Your funds are invested, usually in mutual funds, although many plans are designed to shift funds to more conservative investments as the child ages. Distributions are not subject to federal income tax if used for qualified educational expenses for your named beneficiary: tuition, room and board, fees, books and supplies. Most states offer a 529 plan, and some states offer state income tax deductions or credits. You are not limited to your own state's plan, so take the time to do your research and compare.

3. Take Advantage of Found Money

Every little bit counts. Check out Upromise, a free cashback program that rewards parents for shopping at certain retailers. You simply register your credit cards and loyalty cards, and participating merchants deposit a portion of your purchases into a college account designated for your child. You can even invite friends and family to register their credit and debit cards for contributions. When the college years arrive, withdraw your funds. You'll be amazed at how quickly and easily the cents turn into dollars!

4. Pursue Every Scholarship Opportunity

Your young scholar is in high school—time to get serious. There is a multitude of potential scholarships out there, and you'll need to take a proactive approach. The internet makes research a breeze. Look to useful sites like and for lists of scholarship opportunities. You'll find scholarships based on academic and athletic achievement, areas of study and special interests. Contact your school guidance department for information on scholarship offers from local organizations. Mom and Dad should check with their employers, as some companies offer college scholarships to children of employees.

5. Investigate Financial Aid

Despite the apparent costs, don't let your student immediately rule out his or her dream school. Many colleges and universities offer surprisingly generous financial aid, based or need, scholastic merit or both. Parents will need to fill out the FAFSA, the Free Application for Federal Student Aid. The form is filled out annually by college and graduate students to determine their eligibility for grants, loans and work study jobs.

6. Save on College Credits

High school students should enroll in advanced placement courses whenever possible. Earn a top score on the AP tests and you'll start your college career with credits in the bank.

7. Consider Community College

Many young people are opting for community colleges, where the price of tuition is significantly lower. Attending a community college for the first two years, and then transferring to a four-year institution, can get you a college degree at a fraction of the cost. Commuting from home in lieu of pricey room and board adds to your smart savings.