Saving for your child's education while they are young should be a top priority when developing a financial plan for the future. Planning for college may mean putting money into a 529 plan, which grows tax-free as long as the earnings are used for college expenses. As your children get older, you'll want to educate yourself on how to apply for the different financial aid, college loans and scholarship options.
With college costs rising each year, most students may need help funding their education. Even if college is still a few years away, you'll be faced with the realities of paying for it sooner than you think. Navigating the complexities of the different programs available to finance college may seem overwhelming. The process will take time, and most importantly, you'll need a plan.
Fortunately, the Department of Defense offers a range of services and support, including personal financial counseling, that can help you find information and explore your options. The following steps can help you get started with a plan to pay for college:
- Calculate the cost of college. This first step will help you know what you're up against to allow you to set realistic savings goals. Use the Department of Education College Affordability and Transparency Center calculator. This tool generates reports based on the type of college you are interested in attending.
- Start saving. Take the Military Saves pledge and commit to saving a little each month toward a college fund.
- Explore all available options for tuition help, such as grants, loans and scholarships. If you are eligible for the Post 9/11 GI Bill, you may be able to transfer the benefits to your children in certain circumstances. Read Tuition Help for Military Children for more ideas.
- Seek out and apply for scholarships. There are many types of scholarships available, including those offered in the local community and those specifically for military children. Applying for scholarships can be time consuming, so it's important to encourage your student to target those scholarships he or she is most likely to receive. Check out Collegescholarships.org, which offers a comprehensive review of scholarship websites.
- Get smart on deadlines for federal student aid. Learn about the process for applying well before it's time to submit an application. Federal, state and school deadlines vary for the Free Application for Federal Student Aid, and they may also vary by state or institution.
- Visit your child's high school counselor, who can help you apply for financial aid and find scholarships that are available to students locally.
- Shop around for student loans. The Consumer Financial Protection Bureau's Know Before You Owe initiative helps parents and youth make informed decisions by encouraging the use of a new form, the Financial Aid Shopping Sheet. This form may simplify college financial information for students and their parents.
Even though planning for college can seem like a daunting task, a little time and preparation can help you understand your options and make informed choices. Visit the personal financial counselor at your installation's military and family support center or visit Military OneSource (800-342-9647) to learn more.