Tag Archives: saving for college

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Cedar Ed Lending Shares Pre-College Student Saving Tips for Your Education Fund

Many new parents hope to start immediately putting money away for their child’s college fund, whether it’s dollars in a jar or a slice of savings put into a 529 Plan. Even if they plan far ahead, however, that doesn’t always mean that they’ll be able to cover the full cost of a college education.
In many cases, the kids themselves will pay for most college expenses in the form of student loans taken out each year. These loans go to cover the cost of tuition, as well as room and board, books, health insurance, and other living expense costs that tally up quickly.
However, there are ways that you can save up money ahead of time in order to reduce the amount of loans you have to take out. With these easy saving tips for your education fund, you’ll be able to take some of the stress of your financial needs and be prepared to take full advantage of the college experience.
Start Early
Don’t wait until the last few months of your senior year in high school to start your college fund. You definitely won’t be able to save enough to make a dent on the daily costs of college life. Start your college fund as soon as you can, once you’ve made the decision to attend college or even know which school you want to attend.
You can establish a savings account that will gather interest. As an added bonus, your family members will see how serious you are about saving for college and may shoot you a twenty every once in a while.
Make Sacrifices
The hardest part of saving money is giving up the things you really want. While you’re young you want to have fun by going out at night, but that can be very costly. Sometimes you need to just say no to the expensive nights out or find ways to have fun for free. You’ll be surprised how much money you can save in the long run by renting a movie instead of going out to the theaters. These little sacrifices will add up.
Yard Sale
Over the years you are bound to accumulate tons of junk that you don’t need or use. It’s not going to do you any good piled up in the closet. Instead you can have a yard sale to get rid of all that extra stuff while gaining cash to put towards your college fund. You can also sell items on eBay, Craigslist, or any other online bidding site.
Pack A Lunch
Another one of the great student saving tips is to pack your lunch every day for school. School lunches might not seem that expensive, but it adds up when you’re paying for lunch 5 times a week. Instead you could put a sandwich and snack in a brown paper back in the morning. Over time you’ll save a lot of dough.
No Impulse Purchases
Some people have the bad habit of impulse shopping. When they see a cute bag or awesome pair of jeans, they take out their credit card without really thinking about it. Once in awhile isn’t bad but eventually it can cost you hundreds of dollars because of bad shopping judgment. Instead you can think about the purchase overnight. A good night’s sleep might change your mind.
Public Transit
Although getting a car is important for many high school students, it’s also a huge financial responsibility. You have to pay car payments, auto insurance, and gas costs. That’s thousands of dollars that you can put towards college
Saving money for college is one of the most important things you can do. The money that you save, plus your private student loans, will make your college experience so much easier.

 

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Don’t Fall for these College Myths

It seems as if everyone has a different plan that they tout as being the best for saving for college. Families trying to map out a college payment plan face rough waters as the cost of higher education continues to rise in the face of a still-sick economy.

According to a study by the College Board, the cost of in-state public four-year institutions for the 2011-2012 school year rose 8.3%, compared to last year while out-of-state tuition and fees at public four-year colleges increased by 5.7%. At private nonprofit four-year colleges and universities, costs have jumped 4.5%.

Myth 1: High-income families won’t get any financial aid.
Many parents assume that if they make a high salary, their child won’t be eligible for any financial aid. Briggs says that it’s a good idea for families across the financial spectrum to complete a FAFSA form to see if they qualify for need-based aid and if not, to borrow money through federal student loan programs.
Every student should estimate how much he will likely receive with FAFSA4caster. Don’t avoid filling out a form because you don’t think you’ll qualify for Pell Grants. You may lose out on a university- or state-based grant or scholarship.
Myth 2: If you save too much, it will hurt your eligibility for financial aid.
Parents shouldn’t feel discouraged from saving for their kid’s education over the fear they might qualify for less aid.  Even if it works in your favor, the amount you might receive in financial aid from the government or the college would likely be significantly less than what you could have saved had you started early. The benefits of saving for any financial goal typically far outweigh any consequences of doing so. From a financial aid standpoint, parent assets are only assessed at about 5% after an asset protection allowance is applied, while student assets are assessed at a much higher rate.
Myth 3: The sticker price is the true cost.
Students and their families should distinguish between the sticker price of a school (the advertised price of attendance) and the net cost, which factors in grants or scholarships.
The truth is the sticker price on college doesn’t mean anything–don’t make any decisions until you personally receive your financial aid award letters and compare them.
Myth 4: Private schools are more expensive than public universities.
In general, experts say private schools are considerably more expensive than the sticker price of public schools. However, private schools have significant amounts of aid to award in need-based and merit-based situations, something that cash-strapped state schools can’t offer as easily.
All schools use a slightly different [need-based scholarship] formula, but that formula for many people results in significant discounts, so that $56,000 sticker price that you would pay at a Harvard or Princeton might be at or below the net price that you would pay at a state school.
Myth 5: Students loans are a bad idea.
Although the growing amount of outstanding student loan debt in this country continues to balloon, students shouldn’t be discouraged from borrowing for school. Families need to do their research, start saving early, and borrow only what you need so that your student isn’t left with a mountain of debt.
It’s OK to expect your child to take out loans on his or her own to pay for education beyond what you are able and comfortable with funding.
Myth 6: Uncle Sam doesn’t want you to go to college.
Parents should take advantage of the tax benefits of paying for their child’s education. There are several tax deductions, including the American Opportunity Tax Credit that is worth up to $2,500 per student for the cost of tuition, fees and course materials paid during the taxable year and 40% of the credit (up to $1,000) is refundable even if you owe no tax.
There are a lot of families who don’t claim their education credits in their full amount and that would save them money that they could then use to pay for education.
While it’s no secret that college can be expensive, students can have better control over their debt level if they make smart decisions from the get go.
You control which school you select, the way you purchase your textbooks, and how much you spend while in college. You can’t control your tuition prices, but you can make a dent in the cost of college with your own choices.Above all else, shop around for private student loans after you have satisfied all of your Federal Loans. And after you graduate, remember to consolidate your high interest private student loans with a private student loan consolidation.