ARTICLE | January 10, 2025

The question of how to pay for your child to go to college is oftentimes an overwhelming and intimidating one. But, it doesn’t have to be. By preparing strategies early, you can create a plan that works for you and your family so that you can worry about who your child’s roommate will be, not how you’re going to pay for their tuition. 

Phase 1

When Your Child Is A Toddler, Tween Or In Between

It’s less expensive to save for college now than to borrow money later. Don’t be defeated by how much you may have to save because a little bit along the way becomes a sizeable amount down the road.

As a parent, you should begin to estimate how much college will cost, how much support you want to provide and then start forming a savings plan that will work best for you. The good news is that there are many smart savings vehicles available, including prepaid tuition plans, qualified education savings accounts, savings bonds and individual retirement accounts.

Depending on your specific circumstances, one option may be better than another. We can help you determine which is best for you and your family, and who should own the savings plan.

Phase 2

When Your Child Is In High School

This is arguably the most pivotal time in your child’s life when it comes to planning for college. It’s the time when students can apply for academic scholarships; need-based scholarships and federal and local financial aid.

The majority of colleges require students to file the Free Application for Student Aid, also known as the FAFSA, to initiate their local financial aid packages. The FAFSA also can result in federal aid, separate from other local aid packages.

FAFSA applications ask for information based on the prior tax year. While they’re evaluated differently, the application includes a portion of your income and assets, as well as a portion of your child’s income and assets. Special attention should be paid to both your income and your child’s income as your child enters into his/her sophomore year of high school. Repositioning your assets can help you maximize the amount of financial aid your child receives.

This time also is a good opportunity to compare the amount you’ve managed to save for college funding to the cost of the colleges your child is considering. If there’s a gap, you should consider alternative options, including work study, parent loans, student loans or less expensive schooling options like in-state universities, community college or accelerated programs such as Running Start. We can help you evaluate each of these options and determine the best tool for you and your child.

Phase 3

When Your Child Is In College

Even after your child has enrolled in college, you should continue to monitor your income and assets through your student’s sophomore year, since you’ll continue to file FAFSA applications based on this information.

It’s very common for families to have saved some, but not all of the funds needed to cover the cost of their child’s college education. Maximizing the impact of the American Opportunity credit, a potential $2,500 tax credit for qualified education expenses for a student’s first four years of higher education, is one way to help bridge this gap. Call us to see if you’re eligible to claim this credit.

Phase 4

When Your Child Is A College Graduate

As of 2024, the average student loan debt for bachelor’s degree graduates in the United States is approximately $29,400. This debt can impact many of their future goals, including the ability to buy a home, among other things. We can help develop a plan to reduce their student debt as quickly as possible while reducing payments and interest as well.

Start Planning Today

Whether your children are toddlers, tweens or teens, college planning can never start too early. We can help you develop a road map to make college education an affordable choice for your family. If you’d like to discuss planning for your child’s education, please give us a call.