College, the Right Fit and Cost
College looms in about 4 years for my oldest child and it is on my mind. I am not alone. One of the most common questions I receive from clients and prospects is, “How do we select and pay for college/post grad education for our children (or grandchildren)?”
Typically, I tell people- first, it’s important to realize that college itself is not for everyone, although… some form of higher education is for everyone. Our country needs skilled employees professionally trained to be mechanics, plumbers, medical techs, computer techs, electricians and on the list goes.
Second, there are many great programs and colleges that the average person is unaware even exist. Get counsel when exploring the opportunities for your student.
Third, it also is important to weigh the total cost of a school- the complete package and how to pay for it of course. Many scholarships don’t cover as much of total cost as you may think.
So how do you find the right program and school?
I asked my friend, Bethany Schweitzer, JD, PhD and owner of College Ready, LLC to weigh in.
Seek the Right Fit. She emphasizes the importance of finding the right fit in terms of program, campus culture/environment and of course funding.
Find the Right Advisors. There are many opportunities available to students and her team has a detailed, disciplined process to help high school students assess their career interests, prepare for ACT/SAT, essays, admission interviews and examine the true financial aid total package.
How do you pay for school?
Consider Sources. Most families pay for school combining a variety of resources; by using College 529 account savings, financial aid, various scholarships, grants, work study, loans and current cash flow. Bethany always encourages families to complete the FAFSA to help determine financial aid eligibility.
“In 2015, 2 million students qualified for grants but failed to complete the FAFSA application.” -savingforcollege.com
Start Saving Early. A great option to consider is using tax-advantage 529 college accounts. Bethany encourages “Start saving immediately. Putting aside even a small amount of money each month will be a big help in paying for college--especially if you are able to save from the minute your child is born.”
Develop Saving Habit. “If college is less than 4 years away, start the habit of putting money into a college fund each month. Continue to pay this amount while your student is in college. Some families will increase the amount they are paying while their student is in college because they no longer have the cost of their student living at home (food, activities etc.)”
Know the Benefits. 529 plans have many nuances, flexibility, estate reductions for grandparents and there is opportunity to create educational money for generations of children to come, that most people don’t realize. And of course, the money saved and earned is tax free when used for qualified higher education expenses.
Don’t Sacrifice your Plan. Another very important consideration for parents is to not sacrifice your own current financial well-being and future retirement to fund college for your kid(s). It is a balancing act with many factors to weigh. “If you don’t take care of yourselves, you better hope your kids’ schooling and career can support you when you move in with them!”
I can share more if you would like to discuss your specific situation, just shout.
If you would like to learn more and speak to professionals about college, please reach out to Bethany and her team.
www.collegereadyUS.com
740-972-0700
inquiries@collegereadyUS.com
Some other resources to explore:
FAFSA (Federal Student Aid)- Helps determine financial aid eligibility.
College Planning Stewardship Cents
More Reading on College Planning from Raymond James
Luke Fields
CERTIFIED FINANCIAL PLANNER™
Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offers any tax or other benefits that are only available for investment in such state’s 529 college savings plan.
As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state.
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Raymond James is not affiliated with Bethany Schweitzer, JD, PhD or College Ready, LLC