Why Now is the Perfect Time to Save for College
September marks the beginning of fall and back to school, but you may not know that it’s also National College Savings Month. With school on your mind, now is the perfect time to start thinking about how to save for college.
This past year, the average cost of tuition and fees
was $24,620 for public universities and $49,320 for private colleges. It comes as no surprise how expensive college is becoming, but there are ways to start saving now to lessen the financial burden.
Saving in a 529 Plan Helps Save More Towards Education
One of the most common college savings accounts is a state-sponsored 529 plan. These accounts allow you to save and invest money specifically designated to pay for college. Money from the plan can be used for anything related to higher education, from school supplies to tuition. And the best part is that as long as the money is used towards qualified education expenses, these plans are tax free.
A Savings Plan to Cover Kindergarten to Graduate School
Similar to a 529 plan, a Coverdell Education Savings Account
is another way to cover educational expenses. Contributions to a Coverdell account are not tax-deductible, but they grow tax-free until they are distributed. Unlike 529 plans, which are designed specifically for higher education, Coverdell accounts can be used for various educational expenses from elementary through graduate school.
So, when should you start saving? The earlier, the better. Opening an education savings account when your kids are young can be the difference between feeling confident or panicked when it’s time to send them to school. And any family member can open an account for your child, so all those birthday and holiday checks from grandparents may be put to better use in an education savings account.
Get Free Money Towards College
Many universities offer scholarships that students may apply for, but there are likely other scholarship opportunities available through your community. You can find scholarships for everything from making a prom dress out of duct tape to helping restore the Chesapeake Bay. Talk with your child’s guidance counselor to identify scholarships they may be eligible to apply for. Employers also occasionally offer scholarships for employees’ children. Talk with your human resources department to find out if there are scholarship opportunities available.
At Point Breeze Credit Union, we offer multiple $1,500 scholarships to high school seniors planning to attend a full-time accredited two- or four-year college or accredited technical school. The applicant must be a current owner, joint owner or named on a custodial account in good standing with Point Breeze as of December 31 the previous year to apply. Learn more about our scholarship opportunities here
Navigate Financial Aid
The Free Application for Federal Student Aid (FAFSA
) is your ticket to federal, state and university financial aid. The FASFA form includes questions on student and parent income, savings, the number of students in college and more. Even if you aren’t sure if you or your family will qualify for financial aid, it’s a good idea to fill out the FASFA form to find out.
Money Saving Tips for Once College Arrives
Once your child is enrolled in college, they will likely still be looking for ways to save. Make sure they take advantage of numerous savings for college students and that they cut costs where they can:
- Many schools have a residence assistant position that includes free board and/or hourly pay for accepted students.
- Connect with friends or professors about borrowing textbooks before buying brand new (expensive) ones. There are also programs that let students rent or buy used textbooks instead of buying brand new books.
- Take advantage of college amenities. A lot of college campuses have gyms that students can access for free. Instead of purchasing a separate gym membership, encourage your child to use the equipment on campus.
- Some retail stores and restaurants offer students small discounts with a college I.D. When checking out at restaurants and stores, ask if they offer a discount to college students.