College is just around the corner for your kid, and, despite our urgings, you haven’t saved enough. Or maybe you did, but it fell behind the couch cushions and now you can’t find it. Don’t panic. The lack of educational savings does not doom your child to a life spent in debt or serving fast food.
If you’ve procrastinated on saving or just didn’t have the ability or means to save enough for school, these tips will help you and your college-bound kid navigate the college-funding maze.
1. Look for Outside Help
Government loans can be a lifesaver for an underfunded (or not-even-started) college education. Your income doesn’t really matter, and the credit qualifications are much lower than privately funded student loans. With a fixed 6.8% interest rate, repayment is manageable. Freshmen are eligible for $5,500 a year, and seniors can borrow up to $7,500.
2. Think on a Smaller Scale
With little or no savings, Yale and Dartmouth are probably out. You and your child will need to come to grips with this reality and reach a compromise. Maybe he/she will spend a couple of years at an inexpensive community college until the savings account balance grows. Your student could also attend the local university, but live at home to cut costs.
3. Search for Grants and Scholarships
Free money for college is not a myth, but most people don’t know where to start looking. A simple internet search should reveal tons of scholarships and grants you never knew existed. Watch out for red flags: patronize only trusted sites and never give money or personal information to someone who promises to help you find “free” cash
4. Invest in a 529 Plan and GradSave Account
It’s not too late to start a 529 plan. Eighteen years ago would have been a better time to begin, but that ship has sailed. A 529 plan allows your contributions to grow and offers significant tax benefits over other means of savings. Don’t forget to link your 529 plan to a free GradSave account and make it easy for anyone to help contribute to your child’s education.
While we don’t condone your procrastination, it happens to the best of us. Although saving for college will certainly be more difficult now, it is absolutely not impossible. Tighten the purse strings, buckle down, and know you’re giving your child the best gift possible – the gift of an education.
Now go check behind the couch cushions. Seriously. You need all the pennies, nickels, dimes, and quarters you can get your hands on.
For more college savings advice, news, and insights, read the rest of the GradSave blog!