Updated on February 10th, 2015
When I left home to head off to college, I has no money sense. I didn’t know how to save or budget and I certainly didn’t know how to pay for college. Back then, I thought student loans were just what you did – and of course a grant if they were freely offering that away. A few years into my marriage, my husband and I took the Financial Peace University class by Dave Ramsey and it opened our eyes to debt and understanding money and what a burden paying back those student loans can be. We trudged our way out of debt from student loans, it wasn’t easy. I wish someone had talked to me about the burden of student loans and helped me understand finances. Now that we understand debt better, I know how important it is to have the conversation and teach about college expenses.
This is a sponsored post. All opinions are my own.
How to Pay for College
Grants – Nothing is better than free money helping you to make your way through school. Grants are offered from the government based on your college credit load, tuition costs, as well as how much your family is expected to help contribute to your education expenses. Grants do not have to be repaid and you apply for them while filling out your FAFSA, no in depth essays or hoops to jump through. Grants, however, rarely cover your entire school expenses.
Scholarships – The next best option to pay for your school is through scholarships. There are thousands of different scholarship opportunities out there offered by private companies or individuals. They each have different application processes and can be awarded based on skill such as selecting an essay from among all submissions or the recipient may be picked at random. It is worth the effort to apply for a handful of scholarships that are applicable to you, even if they don’t pan out with an award.
Working Through School – Another option to avoid debt is to work your way through college. This can be demanding on your schedule, even working just a part time position, but avoiding debt makes even this option better for you than student loans if you can manage the busy schedule and keep your grades up. Another option is to work hard through the summer months and save up to supplement your grants and scholarships through the school year.
College Savings Accounts – Parents, grandparents, friends and family can all help you make your way through school by contributing to a 529 college savings account in your name. You can ask extended family to consider contributing to your education in lieu of birthday and Christmas gifts or even add to your own savings account if you start working in high school to prepare for your college years. The 529 savings plan will give you the tax advantages and ability to invest the savings. Visit az529.com/gift1 to find help you get started with a 529 College Savings Account and a free gift!
Student Loans – The last resort should be taking on student loans. These, of course, have an important place in helping to pay for college but are too readily relied on currently. Do everything you can to pay for college up front and use student loans as the last means when absolutely necessary. Remember that once you finish your degree or if you stop school early, your payments will begin and they can be a pretty hefty payment for a new graduate.
College Savings Planner
Once we made our way out of debt from our own student loans and a car payment we had, my husband and I decided we would do what we could to help our children start off on their own without debt. We decided we would start a college savings account for each of our kids as they started Kindergarten, and contribute what we could each year. Every little bit helps, so it doesn’t matter if you start with putting just $100 into their savings account in a year or have a much higher goal. Anything you are able to have available for your child to learn and get an education will really help them get started on their own journey.
You can get started saving by opening a 529 college savings plan. Just like giving to charity, all of the donations you or family and friends make as a contribution to the 529 plan is tax deductible! If family members are still wondering what to gift to your tweens or teens, there is nothing better than a gift like a donation to their education that will give to them the rest of their lives as the investment in their education grows and then helps support their learning and future career.
Arizona’s Post-secondary Education Commission has a great free college savings planner printable that can help you start planning for your child’s college expenses. This is a priceless resource to help you plan how your family will pay for college!
Give them a gift they won’t outgrow.
Learn how you can give the gift of education and receive valuable tax breaks at az529.com/gift1