From Kindergarten to 12th Grade, parents and children can invest thousands of hours preparing the big moment. Countless hours are invested in studying, taking standardized tests, applying to college, agonizing over selecting the right school. It feels like an uphill battle, fueled by both anxiety and excitement. In all of this we often overlook another equally important part of the process of what comes next. Your student is accepted to college, their dream school. Everyone is excited! Until…. we’re hit with the reality of what the dream will cost.

You know there’s a problem when you’re 18 year old is also concerned about the rising cost of college education.

Some families will be fortunate enough to receive scholarships – merit based, athletic or need based or a combination. The reality is that only about 7% of students receive scholarships; on averages scholarships cover 29% of student’s college costs. Most families won’t receive scholarships. Instead, they’ll have to dig deep, very deep into their pockets to help create a path forward for your child.

I was and am one of those parents. It’s not easy. Yet, there are some things we can to lessen the burden. Driving our daughter to campus on Move-in Day was one of the most rewarding moments of parenting journey. Now we had to pay for it.

Loans, out of pocket payments, college saving plans and scholarships can be used to cover the cost of college. It can be some combination of the above, ideally, with debt making up the smallest percentage. So, how can be lessen the financial burden for families. Let’s look at some of the available financial resources.

529 Plans

529 Plans are tax-advantaged accounts that can be used for educational expenses for elementary to graduate school. The funds are typically invested in lifecycle funds, with moderate risk levels. All states and the District of Columbia offer 529 plans, you can open them through your state or with a brokerage firm.

Definitely one of my favorite resources. Start early, make contributions as often and consistently as possible; even small amounts, $25, $50 because time in the market allows you to weather fluctuations and take advantage of high in the market that will offset low performance periods. The contributions you make will grow with compound interest.

Pell Grants

Need based. Offered by the Federal Government to undergraduate students with exceptional financial needs.

Loans

Education Loans are available from commercial lenders including credit unions as well as the Federal Government by the U.S. Department of Education. Parents will own these loans. They have the responsibility for making payments. This means your student won’t be saddled with debt during and after graduation. Just remember to balance this against preparing and saving your own retirement.

FOR STUDENTS

Direct Subsidized Loans – available to students who demonstrate financial need.

Direct Un-subsidized Loans – available to undergraduate and graduate students; students do not need to demonstrate financial need.

FOR PARENTS

Parent Plus Loans/Direct PLUS Loans

Offered by the Federal Government. Available to parents of undergraduate students and to graduate or professional students. Loans are issued to parents to use for the educational purposed for their dependent student.

Scholarships

Undoubtedly, the absolute best option. The jarring reality is that scholarships are not easy to secure. Scholarships can be categorized into need-based, skill-based, or merit-based. There aren’t many options available to students who don’t fit into any of these. You’ll have to dig deep. Start with your State and Local Government websites to find college funding resources available in your area.

Work Study

Work study tops my list as a strong second. It gives students the best of both worlds, students earn money to pay for school and gain invaluable work experience.

Learn more here: https://studentaid.gov/understand-aid/types/work-study

Resources

https://studentaid.gov/understand-aid/types

Gifts

Gifts from family and friends are a great way to supplement college expenses. In my book every dollar helps. Grandparents, aunts, and uncles often offer support. Other relatives also assist young people as they begin the next chapter of their lives.