Planning for college is crucial for ensuring a smooth transition while minimizing financial burdens.
As one of the most significant investments, next to buying a home, college requires careful preparation. In this post, we will explore four essential steps to take in the four years leading up to college, helping you and your loved one embark on this journey with confidence.
FAQs
Q1: Why is education planning important before college?
A1: Education planning helps families manage the financial aspects of college, ensuring that students can attend without excessive debt.
Q2: How can I estimate the cost of college?
A2: Use net price calculators available on college websites to get an estimate of the out-of-pocket costs based on your financial information.
Missouri State University- Springfield Net Price Calculator
Drury University Net Price Calculator
University of Missouri-Columbia Net Price Calculator
University of Missouri-Kansas City Net Price Calculator
St. Louis University (SLU) Net Price Calculator
Q3: What should I consider when researching colleges?
A3: Consider your child’s academic profile, extracurricular interests, and the potential financial aid packages offered by each college.
Four Steps For Comprehensive College Planning
Paying for college is a big financial undertaking.
Next to buying a home, it’s one of the largest purchases most people will make. The overall goal is to find a well-matched school and come out with the least amount of family debt.
Here are four things to do in the four years before college to go into the planning process wisely:Step 1: Evaluate Your College Savings
Take stock of your college savings and crunch some numbers.
- How much do you have saved now?
- How much will you have saved by the time your child enters college?
- Can you increase your monthly contribution?
You can explore various saving scenarios by using an online calculator
Keep in mind that you can continue saving during your child’s college years
Step 2: Understand Financial Aid And Net Price Calculators
Get familiar with financial aid and net price calculators.
Every college has a net price calculator on its website. A net price calculator will give you an estimate of what your family’s out-of-pocket cost—or net price—will be at specific schools.
Colleges differ in the amount of financial aid they offer
By running different net price calculators, you can get an idea of how generous a college might be based on your financial information and your child’s academic profile.
Step 3: Research Colleges
You are likely to get the best financial deal at colleges where your child’s academic profile puts him or her in the top quarter or third of the applicant pool.
Other factors might include the extracurricular activities your child intends to pursue in college and your geographic location.
It’s also smart to research the public universities in your state because they’ll typically have the lowest sticker price.
Step 4: Discuss College Costs With Your Child
Have a frank conversation with your child about college costs.
- Share how much you expect to have saved at the start of college
- Share how much you will be able to contribute each year during college
- Look at a few schools that might be a fit
- Estimate how much borrowing would be required at each
Even if your teen can’t fully grasp the future financial impact, just having the conversation is an important step in helping you or your child avoid excessive borrowing.
By following these four steps, you can create a robust education planning strategy that prepares your child for college while minimizing financial strain. Start early, stay informed, and communicate openly to make this significant life transition as smooth as possible.
Contact your tax and financial advisors to determine the best moves for your situation.