Paying for your childâ€™s college tuition is one of the biggest expenses that you will face as an adult but luckily there are a lot of ways to keep these expenses down even as college tuitions go up.Â Follow the tips below if youâ€™re keen on keeping these costs as low as possible while allowing your child to get the education that they need and deserve.
One of the first things you will need to do is to determine that Expected Family Contribution (EFC) towards your childâ€™s tuition costs. This amount is determined by the federal government based on the FAFSA application that you fill in (Free Application for Federal Student Aid).Â The info that you give to the feds will determine what your ultimate cost will be to pay. The lower your EFC the less you will be asked to pay.
Pre-paying their tuition is fast becoming the leading way of taking the pain out of paying tuition.Â More and more colleges are beginning to participate in pre-paid tuition programs and this has the advantage of not only allowing parents to pay off a large chunk of the tuition ahead of time but also to lock in the rates today rather than when their kid is ready to go. If you start early enough this could amount to literally thousands of dollars.
If youâ€™re not comfortable paying a specific college before your kid has even gotten through grade school then itâ€™s probably a better bet for you to start saving as early as possible.Â There are many educational plans that are offered that will help you to match funds, grow them quicker and provide a tax shelter for you at the same time.You can also start saving in your child’s name through the Coverdell Education Savings Account, a plan that allows funds to be added until your child turns 18 and also provides tax benefits to you.
There are 2 tax benefit programs that you also can take advantage of, the Hope Scholarship and the Lifetime Learning Credit. Both require that the student is enrolled at least part-time and both can provide credits of $1500.00 or more. Whatâ€™s more is that every child in the family can be enrolled in both of these programs.
Using a home equity loan to pay for your childâ€™s tuition may also be a better idea than borrowing money other ways.Â In many cases the amount youâ€™ll pay overall will be less and youâ€™ll probably qualify for tax benefits that will save you even more money.
There you have them.Â Sound ideas that can help you reduce your, and your childâ€™s, tuition debt and may even save you money in other areas. Good luck with them.