This post may include affiliate links or ads. If you purchase anything through the affiliated links, the author/website may earn a commission. The website earns a commission from ads.
Preparing for college can involve many different steps for parents and students, but one of the most important factors is figuring out finances. Families may rely on different sources of funding, such as savings, student loans, grants, scholarships, or the cash value of a whole life insurance or universal life insurance policy. No matter what form of financing you choose, there are some things that you should know if you’re paying for your child’s college education.
It’s more than just tuition
While budgeting for college, families sometimes make the mistake of focusing only on tuition. Tuition is just one aspect of college expenses. Students may also spend on books, food, housing, transportation, parking, and personal expenses. There may be other fees associated with certain majors or departments (such the cost of using lab equipment). While budgeting for college, it’s a good idea to get a full estimate of the costs involved. Many colleges provide a sample breakdown to prospective students. You can also visit online forums or reach out to parents of current college students to find out about any hidden costs as well as their cost of living. This can help you draft a more accurate budget and get a realistic picture of how much money you will need.
Look beyond the FAFSA for financial support
The Free Application for Federal Student Aid (FAFSA) allows students to apply for need-based financial aid, and can provide access to loans, grants, scholarships, and work-study opportunities. But students can also explore other funding opportunities, such as merit-based grants and scholarships offered by the colleges on the top of their list, scholarships provided by local nonprofits and religious institutions, and even scholarships offered by companies. It’s a good idea to start looking into scholarships and grants early and to cast a wide net.
Part-time jobs are not guaranteed
Working part-time can help some students offset some of their college costs. However, while putting together your budget for the first year, you may not want to factor in income from a part-time job. While some campuses assign work-study jobs as part of a financial aid package, some students may take time to find a job, and others may find it difficult to balance a job with their workload and extracurriculars.
Help your kids understand debt repayment
Students relying on federal or private student loans can benefit from an explanation of how loans work. Help your child understand their loan’s grace period (if applicable), their monthly payments, and some effective debt management strategies that may help in the long run.
Even if you don’t need a loan to pay for college, you can ensure that your child learns the essentials of personal finance before they leave home. Talk to them about the basics of budgeting and help them understand how credit cards work.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.