Minimizing the cost of your child's college education

When planning for college, how much do you need to save to send your child to college? First you must know how much college is going to cost.

Most financial advisors might then pull out their preferred financial planning goal calculator which makes assumptions for school choice, inflation, and the rate of return on your family’s savings. This calculates a monthly savings amount. However, advisors that do this are missing one of the most important steps: Minimizing the cost of college. A qualified advisor empowers you to do that!

Here are some points to consider along with some common pitfalls and solutions in college planning that can help you lower your cost of college.


Do research and hire an admissions coach that will help find the colleges that are the best fit

Currently, the average length of time it takes to obtain a four-year degree is 6.2 years. Investing money now to increase your chances of choosing the right college can save 10-20 times that amount in extra tuition. An admissions coach can also help determine your student’s most authentic learning style and identify colleges that fit that learning style.

Do take the ACT exam once as a baseline

Look for someone that provides targeted ACT tutoring. Targeted tutoring is much different than some of the companies that provide comprehensive ACT preparation courses. Look for a tutor that takes the time reviewing your baseline ACT test and targets specific areas to focus your student’s time and effort. This focused tutoring is much more effective at improving results than trying to digest a comprehensive course that covers everything. Scoring high on the ACT gives you more chances of obtaining a scholarship to help pay for your education.

Do complete the FAFSA

Complete your child’s FAFSA as early as possible! Waiting too long to complete it could potentially cause you to miss out on application and scholarship deadlines for certain schools. It is always best to be as prepared as possible so that you can receive as much tuition help as you can.

Do understand college savings vehicles

Educate yourself on what college savings vehicles will increase your chances of receiving financial aid and which ones take more college costs out of your wallet. Also, beware of saving in the child’s name through the use of a custodial account. Child’s assets are assessed at rates of 20%-25% (depending on the methodology) towards the expected family contribution. A parent asset is assessed a much lower rate of 5.65%.

Do consult with a financial advisor

Find a financial advisor who understands and is experienced in college funding and knows strategies that will result in optimal results that benefit you. You are paying them to do a service to save you money, so be sure that you research the options in your area for a credible and knowledgeable advisor.


Do not forget to use other resources when selecting a college

Your high school guidance counselor is not your only resource in selecting a college. This is but one of many resources at your fingertips. Sadly, guidance counselors typically have a very large student load and are highly challenged to provide your child with all the guidance they deserve. To find the best-fit colleges for your student requires significant student-to-counselor time and understanding.

Along with doing your own hands-on research both online and offline for colleges that are a good fit for your child, there are also helpful tools that you can use at your disposal. Consider using a college compatibility tool, visit the campus for a campus tour and even speak to a couple of teachers at potential colleges.

Do not take the ACT exam just once

Frequently, a two-point increase in ACT exam scores results in around $10,000 more scholarship or gift aid to students. After your child takes the ACT, figure out which problem areas they have so that their tutor can boost scores in those areas. Many students take the ACT twice, once as a junior and once as a senior.Remember, the high score your child gets on their ACT, the better chances of getting a scholarship.

Do not think you can’t qualify for financial aid

Parents commonly decide that they make too much to qualify for financial aid without doing a lot of research to see if they actually can qualify. This is typically based on word-of-mouth advice from people who are uninformed about the financial aid process. No matter how much the household makes, you should always fill out your child’s FAFSA.

Do not forget to learn about the financial aid process

Be sure that you learn about the financial aid process before your student’s junior year in high school. Many financial strategies can lower the Expected Family Contribution (EFC), which means lowering the cost of college. Credit card and other debt, large purchases and gifts, having more than one child in college, and capital gains can all have an effective on how much financial aid you are able to get for your child. So be sure to consult with a financial advisor and do your own research so that you are optimizing your chance of financial aid.

Do not work with a financial advisor who is uneducated in college finances

Work with a financial advisor who understands how to calculate the EFC and is aware of all the financial strategies that can be used to lower this number. I have seen clients who worked with well-intentioned but uninformed advisors who, unfortunately, recommended strategies that actually increased the EFC. The FAFSA is an extremely important application for financial aid and it should only be done when you have correct information.

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In summary, educate yourself on all the strategies to minimize the cost of college. If you hire professionals to help you select the right-fit college for your child, you can save enough money to help fund other goals such as retirement. With some general knowledge of the rules, you can be confident in asking the right questions of any professional you hire. You want to be sure they understand the financial aid and college selection process as well. Ultimately, you want to surround yourself with a team of professionals that can work together on providing you admissions coaching, tutoring and financial strategies as well.

More expert advice about Financing Education

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Jason Nowitzki CRPCWealth Advisor

Jason Nowitzki is a Wealth Advisor with Highpoint Planning Partners and a College Funding Consultant with My College Planning Team. Jason has been advising clients since 1999 through a comprehensive financial planning process and is well versed ...

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