Financing a college education has never been easy, and like most students who won’t be attending college for free, it won’t get any easier.
You’ll still have to pay for your college education. And it won’t be cheap.
But it can be cheaper. It is easy to feel overwhelmed at the prospect of paying for college, but financial planning can make a huge difference.
“The main thing is to save as much as you can and start as early as possible,” said Brad Riebel, assistant vice president at US Bank. “Even if a student is a junior in high school and his or her parents haven’t saved anything, they can, and should, start. It’s never too late.”
Lee Stoerzinger, investment planning specialist, agrees that it is never too late to start. In fact, Stoerzinger said parents and students should start saving even if the student is already in college.
“There are a number of short-term options even if the student is already in college,” he said. “Sometimes it comes down to simply budgeting and putting a certain amount of money aside each month. Anything you can do will help.”
It is very important, said Stoerzinger, to use the right financial tools for one’s goals. Because of the incredible amount of financial information out there, both Stoerzinger and Riebel suggest talking with a financial advisor to help with planning.
“Many financial advisors would be willing to sit down with a family for free and talk about initial goals,” Stoerzinger said.
For longer-term planning, any level of consistent saving and investing will go a long way. According to the Minnesota Higher Education Services Office, saving $50 every month at 4 percent interest for 18 years will grow to $15,832. Saving $50 every month at 7 percent interest for 18 years will grow to $21,661.
The Coverdell Education Savings Account (Education IRA) is another great option. It allows families to contribute up to $2,000 per child each year, with no taxes paid along the way and none paid upon withdrawal, as long as the money is used for college.
Certain limitations do apply, however, so consult a financial advisor for further information.
Depending on how much one has saved, college can still cost thousands of dollars more, which is where the financial aid programs come in. Families aren’t expected to pay for the entire cost of a college education right away, but Riebel cautions that many might still feel that way.
“Many people still have the mindset that they have to be rich for their children to go to college, or that they won’t be able to get any help,” he said. “But that’s why financial aid programs like loans and grants were created; to assist every student in attending the college of their choice.”
Riebel suggests using the resources like the high school counselor or a financial aid administrator at any college to help with any questions.
“College should be a reality for every student, regardless of his or her economic background,” Riebel said. “No student should ever say, ‘I can’t afford to go to college.”