College planning for parents is one of the most important parts of being a parent in today's world. An education can equip your child for the next step in life, and should be seen as an investment. That being said, there are some tips every parent should keep in mind while looking for last minute ways to save for college. Here are some ways you can save money and help give your child the education he/she needs.
1. Rethink schooling options - If you cannot afford to send your child to an expensive private school, then don't. Each school has its own strengths, and a schoole choice should be made based on career ambitions and learning needs.
2. Take advantage of Stafford loans - Every family should take advantage of low-interest Stafford loans. These loans are specially tailored to make college more affordable. The Stafford loan does not require "means testing" which means that a family is eligible whether it makes $200,000 or $30,000 dollars a year. However, whether you receive a subsidized or unsubsidized version will depend on your family's financial need. Stafford loans usually have lower interest rates than private loans, at a rate of 3.86% this year. More importantly there is no out of pocket costs to the student or the parents.
3. Use American Opportunity Tax Credit - If your family has an income of less than $160,000 per year, or $80,000 if filing as a single person, you can get a $2,500 tax credit for things like school supplies, equipment, and books. This is really great because this things are not necessarily covered in the cost of tuition.
4. Compare your alternative loan options, if you need one - Taking out a loan my seem less than ideal, but it is still a viable option for many people. Be careful when you look at these loans since they could have variable rates, which means the interest rate could spike. However, several state-based programs are available with low fixed rates and flexible terms.
5. Apply for scholarships - Many scholarship deadlines are not until just a few weeks before the semester starts. This could be the best unexpected part of college planning for parents since some scholarships could cover up to half or more of a year's tuition (depending on the scholarship and where your child attend college) or at least the cost of living expenses and books. Make sure your student applies to as many scholarships as possible. The worst thing that can happen is he or she will get denied.
Follow this five simple tips and you will be able to save money, but more important, you will have the peace of mind knowing that your student is taken care of financially and intellectually.