Helping plan your child’s college education can be pretty stressful at times. There’s so much to think about that it can be difficult to know where to begin, and given the fact that the cost of a college education is at an all-time high, one of the biggest worries you might have is “How are we going to pay for it?”.
You’re not alone. My daughter was just accepted into a program, and as soon as we stopped celebrating, we looked at each other and asked, “What’s it going to cost?” She began feeling worried about the finances, and I told her just like I’ll tell you now. There are options! In fact, below you’ll learn about four of the most common ways you can help your child finance and budget for a college degree, and you’ll both feel better about it financially.
College Savings Accounts
College savings accounts are a great way to save money for your child’s future education. They won’t be as much help if your student is imminently going to college, but if it’s more than a year before they start term, definitely consider one. If you have young children, a college savings account might be just what you need because it’s essentially a savings account with special tax benefits and the bonus of periodic government contributions. There are several you can explore from the Registered Education Savings Plan (be sure to check out the RESP contribution limits if you go for this option) to Coverdell ESAs.
Scholarships and Bursaries
If you’re experiencing financial hardship or have a child who excels in a particular area, you can apply for a scholarship or bursary. It’s free to apply for scholarships, and there are many different types depending on where you live, what your child hopes to study, and where they’ll be studying.
These aren’t loans, and the student is essentially given free funding. It’s always a worthwhile option to explore if you think your child will meet the criteria. There are thousands of scholarships available, and with a bit of research, you are likely to find some funding. And, don’t forget that students should apply for scholarships each year as there are often scholarships specifically for certain programs or years of study.
Student Loans
Another common way of funding a college education is through a student loan. These either come in the form of federal loans which are offered by the government and generally have more flexible repayment rates, or private loans which are provided by banks or credit unions and have higher interest rates. Private loans should only be considered after trying the federal route first. You’ll definitely want to save as much in interest as you possibly can.
Work-Study Programs
Finally, there are work-study programs. These programs provide part-time jobs to students in need of financial assistance and are usually either offered by the college themselves (where the student will work on campus) or within the wider community (such as in schools or other state organizations).
This method isn’t for everyone, and your child needs to balance their studies, social life, and work commitments so that they don’t become overwhelmed. After all, sometimes, a part-time job on top of everything else can tip a person over the edge, and many scholarships require students to maintain a certain GPA.
When considering these four of the most common methods for funding your child’s education, it’s key to remember that it may be best to utilize several of these options simultaneously. Sometimes, funding from one source might not be enough, but when combined with another source, you might just find your student has all he needs.Take things one step at a time and do your research, and you and your child will get there soon enough. Good luck!
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