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Plan to Pay

Plan to Pay

You may have worked your way through college, but it is not realistic for today's college student. The cost of college has risen considerably since you were in college. You may find that it will be necessary to make some lifestyle changes to cover your child's educational expenses. Follow the tips below:

Get Free Money First
Apply for all types of financial aid, especially scholarships and grants (which do not have to be repaid). Check with the financial aid office for scholarships, grants, work-study or other student employment options for which you may qualify.

Budget
The importance of making a budget and following it can't be stressed enough. You may find that as a parent, you need to make some changes to your budget based on the added expense of college. You should create a budget, with your student, for him or her to follow as well. Set realistic spending goals and encourage your child to stick to them. Use a budget calculator to help.

Borrow Wisely
If you still need money to cover the college expenses after you have exhausted your other options, student loans can help.  Be sure to exhaust your federal loan options before accepting a private loan. Use a student loan calculator to estimate your future monthly loan payments. You should help your student determine how much debt is too much. Research starting salaries for his/her chosen career and calculate monthly loan payments. Remind your child that loans are real money that must be repaid -  with interest - so encourage him/her to borrow only what is really needed. [More Information]

Help Contribute
If you help take responsibility for financing your child's education, he/she will be better prepared to repay his/her loans later. Many experts recommend that student loan payments should not exceed 8% of income. You can help your son or daughter from being overwhelmed by too much debt by contributing money from savings or by borrowing a Federal PLUS Loan. If you are unable to borrow money, speak with the college about setting up a payment plan.

Encourage Saving
It will be helpful for your child to work in the summer and save money for the school year. Teach your child to get in the habit of saving money, no matter how small the amount. It is one habit he/she will be thankful for later.

Special Circumstances
If you have any special circumstances, such as loss of employment, unusually high medical expenses, or other financial hardships, contact the college financial aid office. A financial aid officer will be able to discuss your situation and determine if there is any additional help available.