Make Sure You’re Ready for the Expenses of College by Planning Ahead
When your student is nearing high school graduation and planning to attend college, will you be financially prepared? The key to being ready for this milestone is start financial planning early and stick to your investment plan.
Financial aid is available for many, but often it isn’t enough to cover the ever-rising costs of attending a four-year college or university. When you take into account tuition, room and board, books, fees, and a plethora of other expenses associated with college, the costs can seem astronomical. The good news is that if you start early and design a solid college investment plan, when it’s time to send your student off to college, you’ll be ready.
Many college investment plans, such as a 529 plan, are tax-free, so you aren’t required to pay taxes on contributions, earnings growth, or withdrawals when it’s time to move it into education expenses. An experienced financial advisor can provide more information about tax-free savings plans for higher education.
When your student is in their sophomore or junior year, it’s time to start applying for grants, scholarships, and other financial aid. When you begin your research into available grants and scholarships, you may be surprised at how many are out there. The key here is to apply, apply, apply for any and every form of financial assistance your student qualifies for. Many students are awarded numerous scholarships and other financial aid, and the numbers can add up quickly.
There are also several ways you can reduce expenses when it’s time to send your student off to college, including considering starting out at a community college, allowing your student to live at home while they attend a nearby college, choosing public transportation or a bicycle over an automobile, or supplementing expenses with a work-study job. In addition, many high schools have programs that allow students to earn college credits during high school, at a greatly reduced price or even free of charge. This way your student will have a head start, and won’t need to earn—or pay for—as many credit hours to graduate with a college degree.
While there are many ways to reduce college expenses, one of the smartest things you can do is prepare early with a solid college investment plan. If you’d like to learn more about how to start investing in your student’s higher education, contact the team of financial advisors at Mohr Financial Group today. Remember, it’s never too early to start planning for your financial future!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.