Money Matters
College IT’S NEVER TOO SOON — OR TOO LATE — TO PLAN
arents’ GUIDE to Saving for
P The
By the National Endowment for Financial Education (NEFE)
ou may find it impossible to predict what kind of school your child will attend after high school. But it’s important to understand what you will be on the hook for and to start saving today, even if only in small amounts. Research future college costs of poten- tial schools at
www.collegeboard.org. A good strategy to help minimize the costs of college is to have your child start off at a community college, a lower-cost public college or an in-state college that may of- fer lower tuition for in-state residents. After your student has completed credits at a more affordable college, she can transfer to the school of choice. “Remember, it’s not where you start, but
Y
where you finish,” says Patricia Seaman, senior director at the National Endowment for Financial Education. “You can obtain a name-brand degree without paying name-brand college bills.” Few parents pay the entire cost of col-
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lege because scholarships (academic, athletic and others), loans, grants and other financial aid can ease the overall burden. Don’t be too quick to dismiss the idea of loans. Recent research suggests that moderate borrowing improves col- lege completion rates. “Obviously too much student loan debt
burdens young adults for years,” Seaman says. “But avoiding loans at all costs could mean working so much that you don’t pass your classes and have to retake them, or scaling back on the number of classes you take each semester — either way, you’re dragging out school longer than you need to and delaying earning income commen- surate with your college degree.” As a parent, don’t favor college for your
children over your retirement savings. “There are loans for college, but no one will lend you money for retirement,” cau- tions Seaman. “You’ll have many options to pay for college, but if you don’t save for
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