How to Financially Prepare for College

By Richard Cox
Richard Cox
Richard Cox
July 20, 2014 Updated: April 23, 2016

Preparing for college can be one of the most difficult and expensive tasks that will be encountered in a person’s lifetime. Simple mistakes can prove costly down the line and if enough planning errors are made, it might be difficult to meet all of the financial costs required to actually complete the degree. A recent story from the Huffington Post showed the alarming number of students that fail to finish a college degree after starting a specific scholastic program. Rising costs are one of the most common reasons students are unable to complete their degree and obtain their diploma. Here 5 steps to financially plan for college and avoid monetary problems in your undergraduate years.

Start Planning Early

Since we all known when college begins, it is easy to start planning early — well before your student finished high school. The more time you spend planning, the more money you will be able to save to cover tuition costs, and the more opportunity you will have to find scholarship programs that can help you fund your education. This extra time will allow you to become more comfortable with the Free Application for Federal Student Aid, or FAFSA , which will let you known the amount of federal student aid you will be able to obtain. Avoid unrealistic expectations by planning your education early.

Get an Accurate Sense of Your Aid Eligibility

It is always important to know roughly how much aid to expect, and how much money you will need to produce to pay for the remaining expenses. There are many online calculators that will accurately estimate your student aid amounts. These calculations might differ depending on which school your child actually attends. But these calculators will enable you to have a rough estimate of what to expect. Use these tools and avoid surprises later.

Consider A Part-Time Job

Many students avoid part-time jobs because they feel it will be impossible to manage their study time. But studies have shown that a part-time jobs of about 10 hours a week can actually improve productivity and test scores. Through improved organization, connections, and time management skills, your child will also learn valuable skills that will extend beyond school life. There are also many places where you can learn finance online . The extra money can cover some of the basic living expenses that every student faces, and there are often many job resources at your college that will guide you in the right direction and help you find work.

Consider a School Where You Are Overqualified

Most students will quickly jump to the top of their school list and pick the college with the most popular reputation. But this can often be a mistake in terms of costs, as the more popular schools are able to raise tuition prices artificially. Instead, consider a school where you will be overqualified. These schools might offer you better financial packages and help you cut costs over the long term. It is generally a good idea to avoid the brand name schools, as there is little advantage in their scholastic offerings.

Avoid Private Loans

Last, it is usually a good idea to avoid private loans as much as possible. Interest rates are often higher with these loans and the repayment plans are usually less flexible. Consider your federal loan options first, and it is often a good idea to borrow in the parent’s name rather than in the child’s name. This is another way to help reduce costs in interest rates and keep your repayment plans more manageable.

Richard Cox
Richard Cox