It’s back-to-school time, and if you have a child starting or returning to college, no doubt tuition costs are on your mind. Hopefully you’ve been saving up for years, but even if you haven’t, here are my top 15 tips and tricks for minimizing costs and avoiding costly mistakes.
Paying for School
1. FAFSA.
If your child is applying for federal loans or grants, a Free Application for Federal Student Aid (FAFSA) must be completed each year of college. Even if you don’t think you’d qualify for federal aid, it’s worth it for college students and their parents to complete the FAFSA, because schools often use the information for other aid. So, if your child has not done so yet, work together to renew the FAFSA before the following deadlines:
- For attendance from July 1, 2017, to June 30, 2018, forms can be submitted from Oct. 1, 2016, to June 30, 2018. It’s important to note that many states and colleges have earlier deadlines for applying for state or institutional financial aid. State deadlines can be found at https://fafsa.ed.gov/deadlines.htm. Check with individual schools for their deadlines.
- For attendance from July 1, 2018 to June 30, 2019, forms can be submitted from Oct. 1, 2017, to June 30, 2019. But the amount of aid available is limited and it’s given out on a first-come, first-served basis, so it’s best to apply as early as possible.
2. Free money.
Explore grant and scholarship opportunities through the college or affiliation sites (e.g., veteran, firefighter, church organizations).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
3. Don’t despair.
Don’t assume you won’t qualify for aid or low-cost loans. Many assets, like homes and retirement accounts, are not counted in the aid/loan calculation. If you have other children in college, that might also lower your expected contribution. It’s worth applying to find out. Make sure to document qualified education expenses if utilizing college saving plans (e.g., 529) plans or Education Savings Accounts) or IRAs to pay for college.
4. IRAs.
Remember that withdrawals from qualified education accounts and IRAs used to pay for qualified expenses must be made in the year the expense is incurred. Withdrawals made in a different year are considered non-qualified withdrawals subject to taxes and penalties.
Staying Out of Debt
5. Build a budget.
Work with your child to set a budget and strongly encourage her to stick with it. Don’t forget to include travel expenses between school and home.
6. Credit concern.
Instruct your child to avoid on-campus credit card sign-up booths and discuss the negative impact of high-interest debt.
7. Control spending.
If your child already has credit cards, discuss the importance of controlling usage. When your child uses a credit card for a discretionary expense, have her save the same amount in a savings account.
Managing Expenses
8. Go used.
Purchase used books and classroom materials. Most campuses have online sites for sale/exchange of used books and materials.
9. Go off-campus.
Buy school and household supplies off-campus. Such products are usually cheaper at off-campus budget stores or chains.
10. Go car-free.
Leave the car at home. This will save on parking fees, gas, maintenance and possibly insurance costs. Uber, Lyft or a bike can be more affordable ways to travel.
11. Be smart about gifts.
Have your child request money or campus bookstore gift cards from family/friends for holidays and birthdays.
12. Get cooking.
Research school meal plans to save on food. If your child does not know how to cook, help her learn a few quick and healthy recipes.
13. Get a side gig.
Have your student consider applying for an on-campus job. Certain jobs, such as note taking for disabled students for classes your child is already enrolled in, can allow your child to earn extra money without affecting her studies.
Medical Costs
14. Explore nearby options.
If your child is covered under your medical plan, make sure to go over the plan to identify in-network doctors and facilities near campus.
15. Save those receipts.
Have dependent children save receipts for any medical expenses that may be reimbursable through a health Flexible Spending Account (FSA) or deductible on your tax return.
Hopefully these pointers will help you get your college-bound students off on the right financial footing and teach them money-management skills that will extend well beyond their college years.
See Also: 2 College Finance Conundrums Clarified
-
Financial Planning's Paradox: Balancing Riches and True WealthWhile enough money is important for financial security, it does not guarantee fulfillment. How can retirees and financial advisers keep their eye on the ball?
-
A Confident Retirement Starts With These Four StrategiesWork your way around income gaps, tax gaffes and Social Security insecurity with some thoughtful planning and analysis.
-
Financial Planning's Paradox: Balancing Riches and True Wealth
While enough money is important for financial security, it does not guarantee fulfillment. How can retirees and financial advisers keep their eye on the ball?
-
A Confident Retirement Starts With These Four Strategies
Work your way around income gaps, tax gaffes and Social Security insecurity with some thoughtful planning and analysis.
-
Should You Still Wait Until 70 to Claim Social Security?Delaying Social Security until age 70 will increase your benefits. But with shortages ahead, and talk of cuts, is there a case for claiming sooner?
-
Retirement Planning for Couples: How to Plan to Be So Happy TogetherPlanning for retirement as a couple is a team sport that takes open communication, thoughtful planning and a solid financial strategy.
-
Market Turmoil: What History Tells Us About Current VolatilityThis up-and-down uncertainty is nerve-racking, but a look back at previous downturns shows that the markets are resilient. Here's how to ride out the turmoil.
-
Home Insurance: How to Cut Costs Without Losing CoverageNatural disasters are causing home insurance premiums to soar, but don't risk dropping your coverage completely when there are ways to keep costs down.
-
Markets Roller Coaster: Resist the Urge to Make Big ChangesYou could do more harm than good if you react emotionally to volatility. Instead, consider tax-loss harvesting, Roth conversions and how to plan for next time.
-
Why Homeowners Insurance Has Gotten So Very ExpensiveThe home insurance industry is seeing more frequent and bigger claims because of weather, wildfires and other natural disasters.
