Paying for College Part 2: The Details

Wednesday, August 06, 2014

Ideally, planning to pay for college starts on the day you are born, with your parents setting up a 529 College Savings Account, and contributing to it every month…no matter how modest the amount, and continuing those deposits (and hopefully increasing them gradually as time goes on) so that when you are a high school senior there is a nice “nest egg” available for college costs.

Even if that 529 account is set up later, as you approach high school age, it’s possible to make “catch up contributions.” Ask for 529 donations for your birthdays and other special occasions, rather than material gifts from friends and relatives. Work during summers and school vacations and put most of your earnings into the account. You will see how quickly it increases in value. You can earn thousands of dollars before you graduate from high school and leave for college.

Don’t have a 529 account? Again, consider working, not just during high school but also the summer prior to your college freshman year and those that follow. Even at minimum wage you will earn quite a bit, that should be set aside for university expenses.

Always remember that you can get a great education at any accredited college or university; It doesn’t have to be Harvard or Stanford. You college success depends more on your passion, effort, and involvement, rather than on the prestige of the school.

While we are on the topic of elite schools, many of them have extremely generous financial aid packages for students who qualify, as a result of their huge scholarship fund endowments. If your family’s annual gross income is modest (by the university’s standards) you may get more aid from any Ivy League school than from a state university. Again, use the EFC calculator to get an idea of financial commitment.

See how you can cut corners. Compare the cost of renting e-texts, purchasing used books rather than new books. What supplies do you have that you can recycle at college. Try to avoid outfitting your dorm room with all new items. What’s at home that you can bring to save money. Opt for a more modest meal plan, rather than the “all you can eat 24/7 package.” Sometimes sharing an off-campus apartment or small house with a number of other students may be less expensive than paying dorm rent. This will also allow you to cook for yourself and perhaps save on food costs.

Many universities have “pay as you go” plans that allow the EFC out of pocket costs to be spread out over the academic year, rather than being due in a lump sum at the start of each semester or each quarter.

Another strategy is to enroll in a local community college or nearby four year institution, and earn great grades at a much lower cost that an out-of-town private or state university. Live at home to save money, and work a part time job that fits in with your academic commitments. Then, after two years, with an impressive transcript and some savings, transfer to that school you’ve had your heart set on.

Don’t forget about scholarships! Although 70-80% of your financial aid will come from the college you attend, there are many other sources of free money for higher education…if you are willing to do the work to find them and persevere through the application process, which is not always easy. A great source for scholarships is the web site You complete a profile and then receive scholarship opportunity information regularly. The college counselor at your high school may also have books filled with scholarship opportunities. Some are highly competitive and offer quite a bit of money, while others are more modest. Don’t pass up the small sum offers – they can add up very quickly.

Read all the information carefully and apply for  as many as you think you can qualify. It is not unusual for a student to pursue dozens of these financial aid offers from businesses, civic organizations and private foundations.

Short of winning the lottery, there is not “magic” involved in paying for college. It required planning, decision making, time, effort and energy. But with a positive approach and a “team” effort, you will be able to pay for that degree!