PERSONAL FINANCE

5 ways to budget for your kids’ college tuition.

New York Life | April 18, 2023

Father and son outside of a college building

Having kids is a rewarding experience, but a big cost commitment. As they move through the education system, from kindergarten to high school, the pressure to save for college grows.

But, there are options out there to help with the cost of sending your kids to college. From scholarships to studying abroad, find out what could work for you.

1. Scholarships

Many universities offer full scholarships covering tuition, fees, and room and board. The selection process depends on the school and scholarship; but kids who demonstrate academic success, leadership skills, and encouraging attitudes tend to be among the successful applicants. There are also numerous funding opportunities for historically underprivileged groups, in a commitment to foster diversity and equity in education.

2. State vs. private

Public colleges are funded by the government and rely less on tuition and endowments. So, while private college may be your first choice, public schools might be a more affordable alternative. If cost is a major concern, a reputable state university is the ideal way forward. Public colleges also tend to have more programs and resources than private ones.¹

3. Vocational options

From culinary schools to art and design institutions to auto mechanic school, there’s an array of vocational programs available across the country. Trade schools are a great way for kids to learn some key skills in the area that interests them. Job-specific training will prepare them to enter the workforce sooner, helping them gain invaluable industry experience. Plus, it’s generally a more affordable option than college.

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4. Financial help

It’s hardly surprising that few American families pay for their kids’ college education through savings alone.² The cost of tuition can come as a shock. Luckily, financial aid is available, which can help make higher education more affordable for those who don’t have cash to spare. Financial help in the form or grants and repayable loans can also help manage extra costs like coursework supplies. Federal financial aid is distributed based on eligibility to certain criteria during the application process. So, why not explore the different financial support options available that could help give you the extra funds to add to any college savings.

5. College abroad

Aside from the cultural benefits of studying abroad, which for many young people can be a formative experience, there are numerous cost benefits. U.S. college costs have continued to rise over the past 20 years. Private tuition has increased by 134%; and out-of-state and in-state tuition at public schools have increased by 141% and 175% respectively. Students are therefore increasingly turning their attention to affordable opportunities abroad.³ Rather than accumulate lots of debt, some students are opting for colleges in places like France, Ireland, and Switzerland where tuition is typically lower. But, it’s important to do your research. Make sure the college you’re applying to accepts any financial aid, consider exchange rates and travel costs, and don’t forget about visa fees.

Worried about fitting the cost of college into your budget? If you would like the help of a financial planner, speak to a local professional.

1 Public vs. Private Universities: What’s the Difference?

2How America Pays for College 2022 | Sallie Mae

3 A Look at 20 Years of Tuition Costs at National Universities