Financial Tips to Help You Pay for College
As we head into National Financial Literacy Month, I want to take a moment to talk about a topic that is financially impacting my own family, the cost of college. Currently, I have two children in college and a senior in high school. As a parent, I am proud of their academic achievements and want to help place them on the path to college and career success. However, figuring out how to pay for college is stressful, especially without taking on massive debt and/or tapping into savings. 

You’re Not Alone – Student Loan Debt
By the end of 2020, 42.9 million borrowers had collectively borrowed $1.57 trillion in federal student loans. This debt is higher than the collective credit card debt of Americans, which raises the question, “How can I prevent this from happening to my family and me?” The short answer is prepare.

Drawing upon my own experiences as a parent, and the knowledge I have gained from working at Together Credit Union, below are tips that have helped me navigate the best path to paying for my kids’ colleges of choice.

Financial Tips for Parents
Save. It is never too early, or too late, to begin saving for college!

• Consider a 529 Savings Plan - A 529 plan is an investment account that offers tax-free earnings growth and tax-free withdrawals when the funds are used to pay for qualified education expenses.
• Put Aside Bonus Money – use tax refunds, bonuses, and other cash windfalls to help save for college. 
• Engage Friends and Relatives in the College Savings Process – Encourage friends and relatives to contribute to college savings instead of giving gifts. (Don’t forget to have your child[ren] write Thank You letters!)
• Open a Savings Account for Your Child(ren) – Together Credit Union offers an Earn and Learn Savings Account** that earns 3.00% APY* on average daily balances between $5-$1,000.  

Engage your child(ren) in the financial process. Paying for college will impact your entire family, and every member needs to understand how and why.

• Be willing to sacrifice discretionary expenses.
  For example, many parents dream of having college paid for through sports-related scholarships. However, in reality, very few students receive those scholarships. Instead of hemorrhaging money for private lessons, camps, and other expenses, consider using that money for ACT prep courses, academic tutoring, college application and FAFSA counseling, or your college savings plan. 
• Encourage your child(ren) to take AP and dual enrollment courses. 
  Advanced Placement (AP) program offers college-level courses that students can take in high school. If students pass the course or exam, they may earn college credit or placement in academic programs. Dual enrollment is another option that lets students take college classes while still in high school through a direct partnership with a local college or university. While both options have the potential to save you time and money in your undergraduate pursuits, be sure to check with your college of choice to see if the credits will transfer over.
• Support your child earning their own way.
  There are many ways for your child to make money – from as-needed services (babysitting, mowing lawns, tutoring, etc.) to part-time and summer jobs. In my last Money Matters segment, I introduced the Spend, Save, and Share financial model, which helps students develop good money habits by teaching them to spend 50% for necessities and/or expenses, 30% for debt repayments or wants, and 20% for savings. 

Financial Tips for College-Bound Students
Look and apply for scholarships and grants. In St. Louis, college-bound students and current collegians have access to My Scholarship Central, a centralized application portal developed by St. Louis Graduates to increase student access to private college funding resources.  Several national scholarship search tools may also be of use, including Scholly, College Board Scholarship Search, Fastweb, and Scholarships.com.

Submit your completed FAFSA early. Colleges use the Free Application for Federal Student Aid (FAFSA) to determine your federal aid eligibility. In addition, the college of your choice may use your FAFSA data to award their own aid. How to fill out the FAFSA (Remember, your FAFSA form needs to be submitted every year!)

Explore all your federal loan options first. If you need to borrow to pay for school, federal student loans almost always cost less than private student loans and have more protections when it’s time for repayment.

Shop around if your financial aid package does cover the full cost of college. Together Credit Union partnered with Student Choice to offer members a private student loan option to fill educational gaps. Student Choice loans offer low interest rates, flexible repayment and in-school deferment options, and more. To learn more, please CLICK HERE.  

Budget. The U.S. Department of Education’s Office of Federal Student Aid offers a free interactive tool to help students manage their finances called FACT.  The best advice I can give is overestimate your expenses, underestimate your income, and differentiate between needs and wants.

Bite of Reality Fair
To help students understand the importance of budgeting with real-world finances, Together Credit Union will be hosting a free, virtual Bite of Reality Fair on Saturday, April 17th, from 9:30 am -11:00 am. Participants are required to use a smartphone or tablet to complete the simulation. Upon completion, participants will receive a $25 gift card. Registration is required.

Questions?
For additional questions, please email [email protected].

*Earn and Learn Savings available to members up through age 21. APY= Annual Percentage Yield; $5 minimum deposit required to open account and $5 average daily balance required to earn interest. 3.00% APY earned on average daily balances of $5-$1,000; 0.10% APY earned for any balance greater than $1000. APY effective May 19, 2020 and subject to change. See rates for complete details. For a complete deposit account disclosure, stop by a local branch or call our Member Contact Center at 800-325-9905. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government National Credit Union Administration, a U.S. Government Agency.

**To open an Earn & Learn Savings, you must have a Junior Account Program savings, Financial Youth Group savings or Young Adult Financial Group savings account