Seeing your child move on in the world is the most accomplished thing for a parent. Once it’s finally time to attend college, they may need a little help funding it. As you well know, college isn’t exactly the most affordable expense. No matter what degree your child wants to pursue, they’re going to spend thousands throughout their entire college career. Fortunately, there are quite a few ways you can step in to make the process a little easier for them. Here are tips to help your child fund their college education.
Become Their Cosigner
The traditional way of funding college is by taking out student loans. These allow students to pay for everything relating to their education. However, with so many things to consider before taking out a loan, it’s important that you understand the entire scope of the process. How much your child is approved for depends on their FAFSA or free application for federal student aid. The amount of money your child gets on student loans depends on the expected family contribution (EFC) and cost of attendance (COA). Becoming your child’s cosigner can help become more eligible for the loan while also reducing the interest rates that come with it. Though, cosigning does have up and downs, so make sure to think things through before going ahead with it.
Use a HELOC
HELOC, or home equity line of credit, is a special type of loan that functions similarly to a credit card. You are given a set amount based on how much you’ve paid off on your house. To give you a better example, let’s say your home is worth $300,000 and you’ve paid off $170,000. You’d be able to use a majority of that $170,000 for pretty much anything. Homeowners with college-bound children can single-handedly fund their education with a HELOC if they choose to.
Withdraw From a 529 Plan
A 529 plan is a type of savings account that’s used for the sole purpose of financing a beneficiary’s college education. This account is also tax-deferred, which means everything you deposit won’t be reduced due to tax rates, at least upon the initial deposit. Once withdrawn, you’ll be taxed accordingly. You can open this account while your child is still young. In fact, you can do it while you’re still pregnant as well. You just simply open the account in your name and then make them the beneficiary once they’re born.
Help Them Find a Scholarship
The best way to pay for college is to not pay for it at all. This can only be done by having your child apply for a scholarship. A scholarship is essentially a free college education with the only price being that your child succeeds in all of their courses. However, finding a scholarship can be a little challenging as there are thousands to sort through. Not to mention, there’s also the possibility a scholarship may not cover the entirety of the degree. There is a handful that only covers up to half, which leads to you and your child paying for the rest. Take advantage of an online search and application platform’s personalized matching feature, so your child can find what they’re looking for faster.