As a parent, there are only a few moments that make you prouder than watching your child accept their college diploma. There are also few things that they can do that will help their chances at earning a good wage more than earning that degree will. In fact, according to The College Board, the company that offers the SAT, the average student with a four-year degree will earn 66% more than the average student who only graduated high school.
But paying for that degree is expensive. Even if your child attends a state school, you’re still looking at a bill that’s thousands of dollars. In 2015, the average college student graduated with more than $35,000 in debt. The degree they earn can help them get a better paying job, but there’s also ways that you can help them reduce or even eliminate that debt. Here are a few ideas.
It’s Never Too Early To Start Saving
Thanks to the miracles of compounding interest , putting a little money aside when they’re young can give you a healthy fund to draw from when it comes to paying for their education. As a parent, you can open a special savings account, called a 529 plan, that allows you to contribute funds that they can then use to cover tuition and other authorized expenses.
These plans offer a lot of benefits, but they do place restrictions on how you can eventually spend the money. Be sure to consult with your financial advisor to decide if they’re the right choice for you.
Take Advantage of Free Money
One way that the government and colleges make education more affordable is by offering scholarships and grants. While every program is different, the awards usually fall into one of the following groups:
- Financial Aid: These go to students who come from lower-income homes
- Ability-based: These awards go to students who perform well in school, or in sports.
- Student Background: Some colleges offer scholarships to people who grow up in a certain neighborhood, are a member of an underrepresented group, or they’re the child of an Alumni of that university.
- Contests: There are thousands of contests out there for students to win grants and scholarships. To enter, your student might have to write an essay, submit a video, or create a piece of art.
Fastweb is a website that lets you search for scholarships available, but the colleges your child is looking at could have their own contests not listed on this site.
Finally, if you have them apply for all the scholarships they can and there’s still tuition costs left over, federal Stafford loans are a low cost way to get the cash you need. These are special programs that offer lower-than-average interest rates for students to borrow money to afford their education. How much they can borrow depends on your family’s financial situation.
Start Planning Now
Even if your son or daughter is still in diapers, it’s never too soon to start looking for ways to make higher education affordable. If you’re currently receiving regular payments from a structured settlement, lottery, or annuity, contact us today and we’ll give you more information on how we can offer you a lump sum that you can apply towards their tuition, or set up a savings account.
With a little bit of planning, you can make sure they have the funds to get the degree they’ll need to work towards their dream job.
This blog post is intended for informational purposes only. J.G. Wentworth does not provide financial, legal, or tax advice. Please contact an appropriate advisor for such services.
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