You want what's best for your child—which means providing the best educational opportunities available. But if you're juggling bills, saving for retirement, and dealing with other financial pressures, putting away a chunk of money to pay for college may seem unrealistic.
The good news? There are many ways to fund a college education. Here are some options:
Student and parent loans
Different organizations—including U.S. and state governments, private foundations, and the colleges and universities themselves—offer different types of loans to students and parents. Review these options carefully. Keep in mind, a loan is money you have to pay back (with interest).
Find out about federal student loans, college aid, and the Free Application for Federal Student Aid (FAFSA), which most families use to apply for help. Visit the Federal Student Aid website to get details on scholarships and explore other financial aid resources, including a listing of state financial aid offices.
Use the Net Price Calculator (available on many college and university websites) to help you estimate your eligibility for financial aid and out-of-pocket expenses.
The federal government awards Pell Grants based on financial need, as determined through the FAFSA. Colleges and universities award grants based on financial need, merit, or both. State grants vary in amount and are usually need-based awards. Private grants are based on a variety of factors including background, achievements, interests, and need.
Awarded by the federal government, institutions, states, and private sources, scholarships may be based on merit, need, diversity, interests, cultural background, or other things. It is a good idea to research the different types available to make sure you're taking advantage of all the funding you don't have to pay back. Visit Federal Student Aid or CareerOneStop websites for more information.
529 college savings plan
This tax-advantaged savings account offers a great way for you to start saving regularly—and for friends, grandparents, other family members to gift tuition support. Even small contributions to your child's college savings account can add up over the years and build your savings.
Have the talk
Having conversations with your child about school options, passions and interests, and how much support you are able to contribute, are good starting points as you begin making your college funding plan.
Consider some of the creative solutions reported in Fidelity’s College Savings Indicator survey:2
- 51% of parents plan to have their kids work part time during their college years
- 45% are considering having their child live at home and commute to school
- 37% will ask them to set aside some of their own savings to help pay for college
- 40% will encourage them to attend a public college or university
- 23% may ask their kids to work harder to graduate in fewer semesters
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