Coming up with a financial plan for your college education will free you up to enjoy the college experience and focus on your schoolwork. While it’s true that payment is arguably the least exciting thing about college, keep in mind that it’s the facilitator of your education, and that the lack of a financial plan can produce overwhelming stress for both students and parents. While college financial planning ideally begins long before applications are completed and acceptances received, you can create a great plan by starting right now, wherever you are in the college admissions process.
Paying for College Step 1: Determine Your College Costs
This is the first research-heavy step of making a college financial plan. Understanding exactly what you’ll need to pay for while you’re attending college can feel like a big reality check; maybe you were expecting to pay for tuition and housing, but hadn’t factored in additional administrative fees and the mandatory freshman meal plan. Each school is different, so find out the following information about each of the schools to which you’re applying. If you’re still a few years away from applying to college or specific information is unavailable, look up the average costs of the items on the following list so you’re prepared when the time comes.
Paying for College Step 2: Decide Who is Responsible for What Costs
Different families approach this topic in different ways. Some students work their own way through school, while others have full or partial financial assistance from parents/guardians. Determining what portions of your college education you’re responsible for financially and knowing exactly where the rest of the money is coming from will relieve some of the stress that comes with making a financial plan. Additionally, you’ll be required to enter your Expected Family Contribution (EFC) when applying for financial aid, so figure out this piece of information as early as possible.
Some additional questions to discuss with your parents/guardians are the following:
- If they’re providing financial support of any kind, when does it stop? Should you expect any help for graduate school, should you choose to go?
- Do they expect you to be working and saving money while they pay your tuition?
- What about extra educational expenses, like studies abroad or room and board while interning over the summer?
- Will your parents give you an additional allowance for entertainment and non-necessary items?
- What happens if you’re unable to pay for your part of the deal?
- Are you expected to pay your parents back for any percentage of their contributions?
Once you know what pieces of your college education you’ll be paying for and approximately how much money you need to cover the costs, start exploring financing options.
Paying for College Step 3: Research Financial Aid Options
This is the second research-heavy step of creating a college financial plan. Financial aid comes from schools themselves, the government, and outside organizations. There are three types of aid: scholarships, grants, and loans.
Check out the following articles for an in-depth look at your financial aid options and information on how to go about securing each type of aid.
Paying for College Step 4: Start Becoming Financially Independent
Even if your parents or guardians are paying for your college education, now is a great time for you to start learning how to be financially independent.