5 Ways to Pay for College with Your Parents

Today, having a college degree is becoming the prerequisite for any decent job in the real world, as companies constantly look to hire the best-educated people. Graduates from top-ranked schools often get a head start in their careers. However, a college education is one of the most expensive investment decisions that students and their parents can make these days. According to a College Board Report published in 2012, the average annual cost to attend an in-state four-year public college is more than $20,000 per year. It is no surprise that the cost is so high, considering the climbing costs of tuition, school fees, textbooks, accommodation, and other living expenses.

As you plan for college, it’s important to find ways to pay for college. It is essential to have this financial discussion with your parents early on. You don’t want be disappointed after being accepted to your first-choice school because you can’t afford it. And you definitely don’t want to miss the application deadline because you thought your parents couldn’t afford it when they had actually saved for your education. Open, honest communication early on can avoid any misunderstanding while giving both of you and your parents time to plan for the college dream. Here are 5 ways to pay for college with your parents.

1. Create an Education Saving Plan

An education savings plan is a regular plan to which you and your parents can contribute. The plans are administered by colleges or state authorities to help parents and students save for education expenses. One of the biggest advantages of having an education savings plan is the tax advantage; many states offer income tax deductions from the contributions. Some programs even offer exclusive scholarships, grants, and other financial aid opportunities to participants.

2. Crowdfunding With Friends and Family

The crowdfunding trend is no longer limited to the business world only. Many websites, such as Gradsave.com and GiveCollege.com, have been launched to provide a platform for students, parents, family, and friends to contribute to the college fund together. Instead of receiving traditional gifts for events (e.g. birthday, Christmas, graduation), people can make monetary contributions towards your college fund. Even though these platforms charge a small administrative fee (usually a few dollars out of a $50 contribution), they are still a good way to expedite your college saving and make it easier to pay for college.

3. Take Out A Student Loan

Student loans are the most common way for students to fund their own college education. In the United States, most students are forced to take out loans to fund all or part of their college education. According to Project on Student Debt, the average student loan total for the Class of 2011 graduates was more than $26,000. Even though the interest rates are at historically low levels, many former students are still expected to pay substantial monthly repayments for many years. If your student loan does not cover all of your college expenses, your parents can apply for the Parent PLUS Loan as an alternative financing option.

4. Get A Part-Time Job

Many students sign up for a work-study program or simply get a part-time job while going to college. Juggling work and school can be challenging, and not everyone can handle both without sacrificing the academic performance. However, if you have self-discipline and excellent time management, having a part-time job will not only provide a source of income but also show your future potential employers that you are hardworking and possess valuable multi-tasking skills. Ask your parents to see if they know anyone who is hiring part-time employees.

5. Look Out For Scholarships And Grants

As college expenses continue to rise, scholarships and grants play an increasingly important role. Even though there are many scholarships or grants available for students to apply for, the competition for these funds is intense, as the money doesn’t have to be repaid. Also, many of these scholarships require applicants to submit multiple essays and participate in in-person interviews, which can be challenging and overwhelming when you also need to work on college applications and study for classes. One suggestion is to get your parents involved by asking them to help you research scholarship and grant opportunities and narrow down the ones that are the best matches for you. They can also pick up, drop off, or complete applications while you focus on other areas. By working together with your parents, you can maximize the effort and increase the chance of receiving a scholarship or grant to help you pay for college.

Photo Courtesy by Tax Credits under License

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