Student debt continues to be a major problem in today’s society. Although it made higher education possible for students and parents who cannot afford the rising tuition fees, it buries new graduates in debt – even before they can afford to pay it off. Some people think that these student loans make college education worthless – or at least not as valuable as before. Why would you go through all the trouble of getting a degree if it puts you in debt anyway?
Well it does not have to be that way. There are many ways to save for college and if parent and student work together, they can come up with some funds that can really make a difference in future college costs. Preparation is the key.
4 options to put aside money for college
There are a couple of things that you can do to help save for college. If you start early, you could actually eliminate the need for student loans entirely. Here are 4 options for people who want to get a head start on their kid’s college fund.
Commit a percentage of your salary every month
The best way is to simply put aside money every month for your kids college fund. Starting early, even during your kid’s infancy will allow you to commit even just a small amount. That can grow if you put it in a savings account. Choose an account that has a high interest rate. That will help increase the money you save for college exponentially. A time deposit can work – so you have no choice but to keep your hands off that fund. There are many strategies to save money from your home and your entertainment expenses. Even a couple of buck can make a difference in your child’s future.
Utilize prepaid tuition plans
There are prepaid tuition plans that allow parents to pay for tuition fees in today’s rate. As the tuition rises, so will the value of your money. For instance, if 10% of the tuition right now is $1,000, you can be assured of that 10% even if the value grows to be $2,000 when you kid finally goes to college. The most popular plan that you can avail is known as Section 529. The name is derived from the IRS code that allows parents to use it. Any contribution made towards this account is always after taxes. You can choose the school where you will save for college but it has to be said that it does not guarantee acceptance for your child in that particular institution. In case your child is not accepted, the school will give the saved amount in cash or will transfer the funds to the university or college where your kid will go to.
Search for college scholarship programs
Another way to save for college is to look for scholarship programs that you kid can qualify to. This is a great option for parents who are late in saving up for their kids fund. There is a website known as Student Scholarships and they help consolidate scholarship programs from different companies and organizations. This will allow give you a long list of possible sources of funds.
Encourage your kid to work part time during the summer
Lastly, encourage your child to help pay for their education. Put some of the responsibility on their shoulders by asking them to work part time during the summer vacation. Inform them of the effects of student debt so they realize that they should work hard to try and eliminate the need for this loan.
3 ways you never knew could help with college costs
Apart for the 4 options that we mentioned above, there are other ways that you probably never though can help you save for college.
In lieu of gifts, ask family and friends to contribute to your child’s college fund
You don’t really have to do all the saving yourself. You can ask grandparents, godfathers and godmothers to help you contribute in your college fund. Instead of buying toys, encourage them to put in a little amount on birthdays or special holidays into your child’s savings account. That will help grow the money in and keep you from student loans.
Spend and save for college at the same time
There is this interesting website called Upromise and it provides incentives for people who buy from their affiliates. You will set up an account with them where they will put in cashback rewards that you can use for your kid’s college fund. You can also encourage your family and friends to use this site for their online shopping.
Consider putting your child through community college
Another option for you to consider is to put your child through community college during the first two years of what should have been their college education. They can enroll in the institution near you to finish the general subjects and then go to the university or college of their choice for their major subjects. It basically amounts to the same thing and you save a lot during the first two years. You can save on tuition fees and the board and lodging costs because you kid gets to stay with you at home.
All of these will help you save for college so you do not feel the need to apply for a student loan. Try not to put your child through debt if you do not have to. You just have to be resourceful enough to know where you can lower the cost of your college expenses.