The
price tag on a college education is a key factor for many parents. It is also
one of the main elements of a long-term planning process for one's financial
security. A college education can be an extremely valuable resource, as well as
a rewarding experience, but it can also be very expensive; if students and
parents do not plan the financial aspect of college carefully, they may wind up
jeopardizing their financial future.
Applying
for financial aid
About
two-thirds of all college students are eligible for some forms of financial
aid, and this enables a family to spend less on college education.
The aid is usually provided based on the family's income level. There are even
times when family with an annual income of more than $100,000 can be eligible.
In order to receive financial aid, the student should fill up the FAFSA (Free
Application for Federal Student Aid) forms to apply for financial aid.
Financial
Education
As a
parent, it is very important to educate one's kids on topics in personal
finance. Being able to manage one's personal finance is going to be useful
during a student's academic career. Parents should also make sure that they
have enough resources for their children's continuing education. With some
concepts in personal finance, a student is able to utilize the money in the
right way. In addition, teaching one's children to balance their checkbooks
will also be of great help. It is important to teach your kids to be
responsible when they are using a debit or credit card for the first time.
Understanding the advantages and disadvantages is going to be very helpful for
the students. This tactic also helps the parents stay in the safe zone.
Tips
for parents
It is
a bad idea to allocate savings for one's retirement for the college tuition of
one's children. If one is in a situation where it is becoming increasingly
difficult to cover the expenses with one's regular income, it is a good idea to
take a look at Stafford Loans, Parent PLUS Loans and other student loans.
This helps protect a family's financial security for the long term. Also, it is
advisable to look at other assets that are available to meet the expenses associated
with a college education.
It is
also important to check for expenses that emerge during the first semester. By
recording the amount of money the students spend, parents can make sure that
their children won't run out of money after the first month of college. As the
students should have some prior knowledge in personal finance, the whole
process should not be tedious for the parents. Families who have multiple
children can consider sending them to college all at once. This removes the
need to pay for multiple tuition bills, and it lowers the contribution as a
whole. Parent EFC takes into account when one's children are attending college.
For one dependent, if the EFC is $40,000, the same amount will be split when
there are two children who are attending college. As a result, the total number
goes down as a parent no longer has to apply for another EFC.
In
most colleges, students have the chance to work while completing their
educations. As they work through their schooling, they get to understand the
importance of good money management and are more likely to spend their money
more carefully. Finally, it is also advantageous to take out student loans
early in a student's academic career. A student who faces the prospect of debts
takes his or her courses and responsibilities more seriously. As it creates a
sense of urgency, this procedure reduces the overall cost of college expenses.
This
article was written by Karl Stockton for the team at Kanetix. If students need
help with other financial issues, such as new mortgage rules, Kanetix can be of great value.
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