5 Ways to Fund Your Child’s College Education: Did you know that the cost of a 4 year degree program is around $20,000 dollars per year.
The cost of a college education is probably the most expensive thing in bringing up children today. When you take into account tuition fees, test fees, living expenses, accommodation, books and computers it’s not strange that the average cost of college education is over $20,000 per year and that’s before the social side of college life.
Today we live in a world where only the best informed and most prepared can succeed. The Job market is probably the most crucial and difficult aspect of our society and having a college education and degree goes a long way towards succeeding in it.
When our children are ready to enter the world of work it will be even more difficult and a college education will be necessary to achieve. Here are 5 ways to pay your child’s college schooling.
- The normal way of parental funding of college education is out of present income, that is out of your weekly or monthly salary.
Whilst this is the most common method of paying college education it is one that only the very rich or highly paid can afford to do with ease. Even if there are 2 salaries most families find it tough and will take sacrifices, even more so if you have more than 1 child. At best most parents can only afford to pay part of the costs of college education out of present income. Additional sources of income will be needed.
- Your child can work his or her way through college.
Many students have to work whilst learning but many find the experience of managing a job, classes and a social life very difficult. Often the effect is that students drop out of college education, fail their tests or don’t do as well as they could.
- Your child may have the chance to take out student loans to pay their college education.
Today the vast majority of students are driven to take out student loans to pay all or part of their college education. Usually to support family contributions, student loans are the most common way of students paying their own college education. Many students however, leave college with substantial debt and even with interest rates at historically low levels today’s students can expect to have to pay substantial monthly repayments for many years.
- Your child may receive a scholarship or be eligible to funding from either federal or local funds towards the cost of their college education.
There are many sources of student scholarships or grants and with a bit of study most students today can find some grant support. These sources however cannot be promised for the future. Whilst scholarships and grants do not have to be returned and as such are better to loans they are not sure or reliable and therefore depending on them for our children is a risk.
- Take out a school savings plan to fund college education.
An school savings plan is a regular saving plan into which you and your children can pay. The plans are handled by colleges or state officials and can be taken out for any child including a newborn babies. Because of the benefits of long term compound interest the earlier you take out your plan the easier it will be and the cheaper your contributions will be. Because the funds are built up prior to going to college students do not have to rely on scholarships, handouts or loans and they can focus on their studies.
There are a number of choices to fund your child’s college education but the only way funds can be sure is by you taking out an education savings plan. With the education savings plan you decide what you can invest and your child can also add to his or her college education. With luck scholarships and grants will still be available as will loans to top up if necessary. If your child does not go to college the fund can be cashed in.
Taking out an education savings plan early will give your child the real chance of a college education and the best odds for a job when they leave college.