CONSIDER THIS: Parents and students are struggling to determine how much college is going to cost them and how they are going to pay as costs continue to rise. Many are searching for ways to plan ahead. According to DailyFinance.com, net contributions to 529 plans - college savings plans which allow for tax-free savings and interest - reached $9 billion in 2010. Additionally, many students have expanded their efforts to qualify for scholarships. Recent graduate Abby Sellers of Cumming received six scholarships in addition to the Hope scholarship and Hope grant equalization for the 2011-2012 academic year.
"My best advice is to find out in advance the deadline to apply for a particular scholarship," says Sellers. "Some of the applications I sent in for fall 2011 were due in October 2010. A lot of students miss out on great scholarships because they aren't aware of when applications are due."
According to a study by the National Center for Education Statistics, the average yearly cost of college (including tuition, room and board) was $12,283 at public institutions and $31,233 at private institutions for the academic year of 2008-2009. The report states, "Between 1998-1999 and 2008-2009, prices for undergraduate tuition, room, and board at public institutions rose 32 percent and prices at private institutions rose 24 percent, after adjustment for inflation." These hefty figures fail to account for the deluge of other costs associated with higher education, like books, travel expenses, personal expenses, cell phone bills and transportation.
In Georgia, recent changes to the lottery-funded Hope Scholarship will increase costs for most students. Scholarships will be reduced to 90 percent for all students except those with the highest grades and SAT scores, and funding for books and mandatory fees will also be eliminated. An increasing number of students work while going to school, or choose to work for several years before entering college to help pay for tuition, books, living expenses and other college costs. Some even opt to begin studies at a community college to complete core curriculum requirements at a lower tuition rate.
You may want to know:
- What are some tips for saving money for college?
- When should I start saving for my child's college education?
- What is the best way to save for my child's college education?
- Can I predict the future cost of my child's college education?
- Do colleges estimate additional costs beyond tuition?
- Where do college applicants start to search for financial aid?
- What qualifications do students need to have to be considered for academic scholarships?
- When do families begin to incur expenses related to college preparation?
- How many students graduate with student loans they must repay?
An insider’s perspective:
According to Randy Weed, president of University Health Federal Credit Union in Augusta, the most important thing parents can do to be ready to pay for college is to start early. "It's obvious advice, but it is vital," explains Weed. "Your child's first birthday is not too soon to start saving. Find a 529 plan and make it a carved-in-stone part of your budget." Weed explains that even a modest amount of advanced preparation each year can help to limit the amount of private student loans necessary to make up the difference between savings and the cost of college. "It can be daunting to graduate with a large amount of debt," says Weed. "I've seen people end up with $60,000 in student loans. That kind of debt can handicap a young person's financial stability for years. Every dollar you save in advance is an investment in your child's future."
Vacation Season: On the Road Again?
Car Buying Season: Lease vs. Purchase
From Free to Fee Is Free Checking a Thing of the Past?
Avoiding Refund Risks and Regrets - Making the Most of Your Tax Refund
Economy Spurs New Approach to Financial Resolutions
Moonlighting: How High is the Cost of Making More Money?
Holiday Season: Bleak or Bright
How High is the Cost of a Low Credit Score?
Paying Online - What Do Consumers Need to Know to Stay Safe?
Georgians Take a Second Look at Their Retirement Savings
What Does New Overdraft Legislation Mean to Consumers?
Starting Over: Recovering from a Life Crisis
When and How Does Credit Counseling Help
The True Cost of Buying a Car
Seeking Ways to Save in a Tough Economy
How Do Financial Institutions Contribute to National Security?
*Views and opinions expressed on these videos do not necessarily reflect those of Georgia Credit Union Affiliates.