HomeArticlesPaying for College During Difficult Economic Times

Dear Estelle. My son is a junior in high school and frankly I’m panicked how we are going to pay his college costs a year and a half from now. We have been prudent savers, accumulating what was a substantial amount of money for his college tuition and expenses; his grandparents have contributed faithfully to a 529 for years. Now we are faced with huge financial losses of our investments and shocked by the college price tags. We have always valued providing a quality college education for our children. How can we ensure our child’s future considering these difficult circumstances?
AZL, parent, Cherry Creek School District

As you know, you are not alone in your concerns. These are indeed tough economic times and guaranteed to worsen before they improve. Parents of current seniors will undoubtedly weather the situation a little easier than parents of upcoming juniors and sophomores if they’ve been prudent about focusing their investments more conservatively in recent years. However, also an issue is the availability of cash at the institutional level. Colleges that rely on cash from their endowments may find themselves equally strapped to offer the amount of financial aid they typically provide to students.

So, what alternatives do students and their parents have to ensure that they will have a quality college education faced with the dire economic projections currently pending in the USA? In other words, what can students do to improve their chances of attending colleges, which will best suit them, and be affordable to their parents?

1. First of all, grades are more important than ever ! Better grades result in more college options. Students will continue to be accepted to schools that want them. Going hand in hand with this is better financial aid and even merit scholarships. The better the grades and test scores the bigger the scholarships. An improved GPA could result in increased dollars in scholarships.

2. Focusing on a good fit for college will be beneficial too. If affordability is an issue for the family, it might be wise to downsize expectations to schools which will be more willing to assist with financing a college education.

3. Next year’s high school seniors need to start focusing on finding possible scholarships now when there’s plenty of time to locate them. Apply for every scholarship you can but don’t waste your time with those that have no relevance to you. Students should plan to apply for admissions to low-cost schools early in their senior year, before November 30. And they need to fill out the FAFSA (Free Application for Federal Student Aid) as soon as possible each January, because some aid is handed out early on a first-come, first-serve basis. This applies to this year’s seniors, too.

4. Be sure to check whether your student qualifies for Colorado’s student aid grant. In some colleges in Colorado, there may be merit-based awards offered to students who demonstrate outstanding academic achievement. (http://highered.colorado.gov/Finance/FinancialAid)

5. Students should apply to a few affordable schools. Applying just to “reach” schools could result in disappointment for students particularly if they have no reasonable options. The disappointment could come in terms of both nonacceptance and/or very little aid money. What is an affordable school? Community colleges and in-state public colleges or universities. There are also some private schools that are comparatively more affordable than others. Sometimes the most expensive institutions, while not Ivies or highly selective, give out the most generous aid and are cheaper in the long run than public institutions.

6. For students starting college next fall and those already in college, remember that many colleges offer additional scholarships to students who receive good grades during their freshman year and beyond. Ask about this in your college financial aid office.

7. Be “Loan Smart.” If you plan to use student or parent loans, find the ones that are best for you and your family. Not all loans are the same.

In these turbulent times, it is difficult to know exactly how all these scenarios will play out but it is important for families not to give up hope for the future and especially for the future of their children’s college education.

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