Saving for college costs is important, but there is more to college planning than just savings strategies. Here’s some actionable information that may help you significantly reduce your family’s out-of-pocket college costs. Every dollar saved on college can be reallocated for other important purposes, such as retirement savings.
7 actions to help you save ON, not just for college costs
- Research the school information that directly impacts costs – including cost of attendance, graduation rates and room and board costs. The four-year estimated “sticker price” is NOT necessarily the price you have to pay.
- What financial aid are you eligible to grab? Need-based financial aid can substantially reduce the family out-of-pocket college costs.
- Study how the school determines your financial aid eligibility and consequently how much you’ll have to contribute to the annual costs (there are ways to reduce the amount you’ll be required to pay).
- What merit-based scholarships do you qualify for? School based merit scholarships can significantly reduce college costs.
- What is the most efficient way for you to save for college? Analyze the options for use as college savings/retirement savings vehicles.
- How well does your state-sponsored 529-plan measure up? Review important tax benefits of the state-sponsored 529-plan (if available).
- What are your education tax credit options? Evaluate which education tax credit/savings options may yield the most tax savings.
Key considerations in managing college costs
Three of the most valuable considerations are the Expected Family Contribution (EFC) calculation, the projected aid package and the analysis that determines if you may be able to further increase financial aid eligibility with the help of college planning strategies
The expected family contribution as it is known, is the starting point for offering value-added college planning services to a family. The EFC is a calculated assessment – based on a family’s financial and household information – and is the amount they will be expected to pay for college before qualifying for any need-based financial aid from a school. Many families making more than $150,000 per year qualify for need-based financial aid.
Because need-based financial aid can significantly reduce the out-of-pocket college costs for middle and upper-middle-income families, at a minimum you should be able to estimate your expected family contribution and help ensure that you can at least cover that amount.
Partner with us for insights on making children’s college costs more manageable
All schools don’t offer the same financial aid packages. Therefore, it can end up costing you more to send your child to a school with a lower cost of attendance than one with a higher cost. This can occur if the lower-cost school offers a poor financial aid package. You should know a school’s history of giving money before you apply. This can ease the disappointment when you get a bad financial aid package from your child’s top school choice.
Our partner, Collegiate Funding Solutions, provide this actionable information for us to analyze and advise.. Ultimately, you want to pick the right college for your child, at the right price, for the right reasons. Reach out to see if our save on, not just save for college approach might lower your overall college cost.
*Collegiate Funding Solutions is a separate entity from Envision Wealth Planning and LPL Financial.