While most parents hope to support their children throughout their time in college as best as they can, college expenses can make this process very difficult and taxing for a family. Due to the high cost of tuition, room and board, living expenses and more, college can be a stressful financial issue for many families to have to deal with. Fortunately, there are a number of ways that you can work to save and prepare for your child's college expenses. Read on for a few suggestions on how to prepare for these costs without sacrificing other expenses in your life.
1. Set Up a College Tuition Savings
If you're thinking ahead several years prior to when your child will plan to attend college, you can begin to set aside money for his or her tuition as early as possible. Set up a separate account for this purpose and ensure that you have a high interest rate on the account. CD accounts are an excellent way of doing this; they tend to have high rates of return on interest, but they stipulate that you not make withdrawals from the account during the period of the account maturation. This will provide an added incentive for you to avoid spending the money that you're saving for your child's college expenses in the interim.
2. Pre-Pay Tuition
More and more colleges are setting up programs by which you can pre-pay for your child's tuition. These payments will generally go toward upcoming tuition even if your child has yet to apply for college; the colleges that participate in this form of advance tuition payment work together to ensure that the tuition payment will go to any school in the system, provided that your student applies and is accepted later on. This can be a good way of offsetting the costs of college tuition by spreading out the cost over a longer period of time.
3. Financial Aid
Most colleges today provide some type of financial aid to assist families when they plan to send their children to college. This may come in the form of certain merit or specialized scholarships, and it also may be need-blind. In the latter case, any family with a child who has been accepted to a college program will receive financial assistance of some kind or another. Generally speaking, you'll be expected to contribute an Expected Family Contribution, or EFC, which is an amount of money that the college will require that you pay out of pocket for your child's expenses. However, the EFC is typically much less than the total cost of the college expenses would be.
For more information about how to set up an account to save for your child's college expenses, speak with a representative at your bank. For information about financial aid at a school that your child is interested in applying to, speak with a financial adviser at that institution.