Saving for college
(Editor's note: This is the first of a two-part series.)
Most articles about college planning focus on advice for parents or other adults who expect to pay the cost for a younger person's education. But what about the beneficiary who plans to attend college?
Although most young people don't have the assets for college savings that their elders do, being part of the planning process can be educational, offering financial lessons for the future. Children can earn money, learn about sources of financial aid, research potential colleges, and take other steps that may relieve their parents of some of the responsibility of college planning. In addition, some experts believe that if children are actively involved in planning for their future, they may be more committed when entering college and ultimately have a more successful experience than they would have otherwise.
According to the U.S. Department of Education, the best time to introduce children to college planning is when they are in middle school. You may want to initiate discussions about college and explain the importance of developing good study habits and getting involved in extracurricular activities -- to instill the idea that your family supports higher education.
You may also want to encourage your children to begin thinking about the career they would like to pursue, which is likely to influence their choice of college, as well as to establish a savings account that could be earmarked for education expenses. In addition, you can teach basic lessons about compounding, investing, and other money management issues.
When students are in the latter part of middle school, they can also start planning to make the most of high school experiences with an eye toward college. Remind your budding scholar that success in high school depends on skills and attitudes that are developed in middle school or earlier. For example, time management skills developed in middle school may eventually help a high school student manage schoolwork, a job, sports, and other interests. And when the time comes to pick classes for the first year of high school, a good mix of college prep courses may be important.
You can help your child plan for college by assisting him or her with developing a realistic budget. The chart below details enrollment-weighted averages and is intended to illustrate the costs that a student is likely to pay in various situations.1
1Source: Trends in College Pricing Annual Survey, the College Board, 2011-2012 academic year.
**Based on estimated average student expenses. Average total expenses include room and board costs for commuter students, which are average estimated living expenses for students living off-campus but not with parents.
A Higher Gear in High School
Many high school students are mature enough to plan for college at a deeper level. Appropriate planning may include the following:
Matching personal aptitudes with vocational interests -- High school guidance counselors can help students learn about careers that utilize skills in math, science, language arts, social studies, and other areas of interest, as well as postsecondary courses of study in these areas.
Maintaining high academic standards -- Colleges prefer applicants that have exceeded basic requirements and taken more challenging courses in language arts, math, science, social studies, foreign languages, and other areas. Many high schools permit qualified students to earn college credits by taking Advanced Placement courses. Excelling in these classes may demonstrate motivation and reduce the number of academic requirements after a student enters college.