We sent our oldest child to college last year. After we got her settled and dried our tears, we had the same reaction that a lot of parents have: Wow…that 18 years went fast.
Sending your child to college can not only sneak up on you emotionally, but financially as well. We managed to put a little bit of money in a 529 account over the years (while paying for braces and dance costumes) but it wasn’t nearly enough. In addition, the stock market tanked just when we were about to need it.
Still, it is our plan for both of our kids that they will graduate from college debt-free and we don’t want to have to take on any parental debt to do it. So far, so good. We are paying for our daughter’s college expenses out of our current cash flow and plan to do the same for her brother four years from now.
Here are some of the things I have learned about paying for college without using student loans.
1. If you have a lot of time, start saving now.
This is an obvious suggestion, but as I said, 18 years will go by more quickly than you can ever imagine. Carve as much as possible out of your budget and add in junior’s birthday and Christmas money gifts. Even small amounts of money will start to add up when given enough time.
2. If you have a medium time frame, start a new stream of income.
If you have a couple of years or more before your child heads off to college, it’s a good time to start a side business or find other ways to make extra money. Open a separate account and assign those funds to college savings. Depending on how much you earn and how big of a head start you have, you may be able to bankroll college this way.
3. If your kid is packing his or her bags, make sure your child has applied for all the grants and scholarships available to him or her.
Start with the college your child is attending. You will have to fill out a FAFSA form and your child may have to complete some additional scholarship applications as well. Most schools will offer both needs-based and merit-based scholarships.
At my daughter’s college, individual schools within the university have scholarships as well, so if your child has been admitted to a particular school (engineering, education, journalism, etc.) make sure to check with them as well.
And don’t overlook smaller, outside scholarships. If you start doing your research you’ll find all kinds of $250 and $500 scholarships out there. Many of them are local so investigate the organizations your kids are involved in, your place of work, and community groups. Because of their lower dollar amounts, fewer people apply for these scholarships so you child’s odds of earning them are higher.
Other Things That Can Help
Consider an in-state school.
Your public university can be the best cost-fighting tool you have. Many are excellent education buys.
In addition to a very reasonable tuition, our daughter’s school offers a compact that locks in the tuition price for four years. With college costs rising much faster than inflation, that’s a big deal.
(Also think about online college classes and nearby campuses to avoid room and board costs.)
Have your kids help out.
Kids can (and some would argue should) be involved in paying for their college education. The amount of your child’s involvement will depend on your philosophy and financial situation.
Our daughter worked last summer and saved her high school graduation money to use for spending money during her freshman year. She’ll be working at the same job this summer and plans to apply for a campus job next year as well.
If your kid is the next Michael Jordan, you’re in luck! Michael had his education paid for by the University of North Carolina. (He majored in Cultural Geography in case you were wondering.)
But chances are a full athletic scholarship is not in your child’s future. The good news is that scholarships exist for all kinds of things beyond athletics. There are scholarships for academics, leadership, and service, just to name a few.
A large part of our daughter’s tuition is being paid for by scholarships she won for both academics and her school involvement/leadership. Benjamin Kaplan was so successful in funding his Harvard education with scholarships that he wrote a book about How to Go To College Almost for Free.
Most people have strong ideas about choosing and paying for a college education. How about you? Did you pay for your college costs or did your parents? Did you graduate with student loans? What’s your plan for your kids?