Saving for the Future
We get it, “future” can be a scary word, especially when dealing with something as important as college. But the sooner you start, the better equipped you and your child will be when they head off for college. So, if you’re asking yourself “How am I going to afford college?” Here are some options to help you prepare for college.
You might think starting a savings account is the best way to save up for college, but an Education Savings Account (ERA) or an Education IRA. However, not everyone can sign up for an ERA, and account holders are limited to contributing only $2000 per year. If you qualify for an ERA, it can be a good option for building your savings, but you shouldn’t stop there.
Start a 529 Plan
Many parents choose to start contributing to a 529 to build their college savings. If you qualified for an ERA, you can start a 529 and put away more each year than an ERA alone. Like an ERA, a 529 will grow tax-free, allowing you to save more than a traditional savings account.
Make sure you take the time to carefully review the fine print to make sure the 529 plan provides the right benefits for you and your family, as some plans may change your investments depending on the age of your child.
Earning More Money
We don’t necessarily mean to go out and get another job, because there are many resources you can use to get college paid for you.
There are thousands of scholarships available to students who apply for them, even if your child can only win small scholarships, they can be an easy way to pay for college when you add them up. Even though teenagers might not typically like thinking about their future, help them find and apply for scholarships.
Keep in mind that there are different types of scholarships that fit into different categories. These categories include merit scholarships, needs-based scholarships, federal scholarships, private scholarships, and corporate scholarships.
- Athletic Scholarships
- Academic Scholarships
- Artistic Scholarships
Usually, these scholarships are awarded based on demonstrated talent, performance, or merit of a student. In order to qualify for and win a merit scholarship, students usually should keep up their grades, be involved in extracurricular activities, and place well in the ACT and SAT tests. Applying early for these scholarships also improves the chances of winning an award.
- College-Awarded Scholarships
- Federal Student Aid Awards
- Pell Grants
In order to apply for a needs-based scholarship, you must fill out the Free Application for Federal Student Aid form, or FAFSA. Awards are based on your family’s income and the amount of the award will depend on the type of grant or scholarships you apply for.
As the name implies, these scholarships are sponsored by the Federal government. They can be awarded on merit, or include needs-based scholarships. When you fill out your FAFSA form, your information will be sent to some federal scholarship organizations.
Private organizations, foundations, and philanthropists offer scholarships for students. In order to find these scholarships, you can use these resources to search for private scholarships as well as other types of scholarships.
The U.S. Department of Labor’s Scholarship Finder
Many big businesses offer scholarships and giveaways to students who apply. Burger King, Chick-fils-A, The Coca-Cola Corporation, and more offer awards to help students pay for tuition and fees. Some of these awards are contests, while others require essay or video submissions.
Visit Scholarships.com to learn more about corporate scholarships and to start an application.