The minute parents decide to start a family, the cost of getting a college education for their kids is already at the back of their minds. Nothing beats the joy, fulfillment and challenges of raising kids – but there’s no denying the fact that it also costs a lot.
Starting from the delivery of the baby up to the time they grow into school age kids, high schoolers and college-bound young men and women, these are the phases in their lives that you need to financially prepare for.
Here, we will give you an idea about the real costs of getting a college education in the US and how you can really raise money for college – whether you’re a parent or a student who is trying to support yourself by paying for your own education.
Quick Stats on the Cost of College Education in the US
First, let’s take a quick look at the real costs of getting a college education in the US. According to the National Center for Education Statistics, the average costs of undergraduate tuition, room and board for the 2011 to 2012 academic year are as follows:
- All institutions = $19,399
- Public institutions = $14,292
- Private not-for-profit and for-profit institutions = $33,047
From a student’s perspective, according to Statista.com, here’s how they financed their college education:
- 56% – loan from different sources, such as student loans from the government
- 55% – scholarship from the college other sources
- 47% – from parents or relatives
- 41% – from personal work or savings
- 8% – from loans from parents or other relatives who students promised to pay back
- 6% – other sources
As you can see, most college students get their funds through loans, thus the prevalence of student loans that need to be paid as soon as they get out of the university. You don’t want to spend the first few years of your life out in the real world slaving at work just to pay off these loans, so it really pays to raise the money ahead of time.
Top 10 Ways to Really Raise Money for College
To give you an idea about what you can do to raise money for college, check out these top tips:
1. Save for your kid’s college education as early as possible
The good news for college-bound kids is that despite the ever-rising costs of university tuition, parents still strive to save enough money to give their kids the best education. If you are a parent who is worried about how you will financially support your child’s college education, the rule of thumb to follow is to start as early as possible.
If you have a two-year-old daughter, for example, have her aunts, uncles, grandparents and other relatives give money instead of toys as birthday gifts. The cash that you will pool together will go towards her college education. Once your child is old enough to do household chores or run errands, pay him or her what you would otherwise pay other people. This will not just add to their college fund, but will also instil in them the value of hard work.
2. Check out the different types of college savings plans available
Fortunately for parents, there are many savings plans available that will help them send their kids to college. Some options include:
- 529 College Plans
Simply known as 529, this is a college savings plan which is based from a section of the same number of the Internal Revenue Service Code. It basically allows tax benefits to be given to individuals who decide to invest early for their kid’s college education. There are prepaid tuition plans and college savings plans which are both for 529, although there are limits involved. One example is in the state of New York where parents can contribute up to $10,000 annually for their kid’s college education plan, which involves a state tax income reduction. Rates vary from state to state, so it is best to check your options beforehand.
- Roth IRA for Self-Employed
If you’re a self-employed parent, you can use a Roth IRA or Individual Retirement Account to invest in a college savings fund for your kids. What’s good about going for this option is that when you actually need the money, you can use it without being billed with penalties or having to pay taxes. You can raise money for college in a short time, if you are determined!
3. Look for sources of scholarships and grants
You can also check out some private sources of scholarships and grants to finance your kid’s college educations. Some of the options include private clubs, the local organizations in your area, religious groups, companies, corporations, foundations, professional associations, fraternities, sororities, social groups and civic groups.
4. If you need some quick cash, raid your IRA
As mentioned earlier, an IRA is your retirement savings fund and this serves as a quick source of cash if you’re desperate for one. As long as you are eligible for a withdrawal, you can get some funds from your retirement account without having to pay penalties. Just make sure to do a few calculations because there are penalties involved if you are not eligible for withdrawal. Raise money for college in time and always plan ahead, in order to avoid all problems!
5. Know how to reduce your capital gains
If you’re a parent who is investing in stocks, bonds or mutual funds, you can sell your investment and redeploy the cash. The redeployment can be done into your retirement fund, a house purchase or paying off debts. It’s recommended that you sell a couple of years before your child head off to college to make this financial move work to your advantage.
1. Find ways to cut back on your tuition costs as a college student
On the other hand, if you are a student, you can also find ways to raise money for college education. Let’s take your tuition fees as an example. When you were still in the process of filling out those application forms, did you consider how much the tuition fee costs? If you got an acceptance letter from more than one educational institution, do consider the one with the lower tuition fees, especially if you know that your parents are short on cash.
You can also apply for a scholarship or Advanced Placement classes. Persistence and resourcefulness are important if you would like to find ways to cut back on your college tuition fees as a student.
2. Know what your options are for room and board
Next comes the room and board. Based on the figures provided by CollegeBoard.org, students have to pay more than $9,200 per year for room and board at public colleges and universities. Naturally, the private educational institutions would charge more. If you’re willing to share your room with another student, you can already slash off this cost in half, so be willing to put up with cramped quarters – at least while you’re still a student. Plus, there are many ways to raise money for college, all you have to do is go online.
3. Create a budget, and stick to it
There’s absolutely nothing wrong in having an active social life while in college, but remember that you are living on a student’s budget. Save money on food by preparing your own meals, looking for cheaper means of transportation, using old instead of new books, heading off to superstores for cheaper school supplies and saving on entertainment expenses. Making a budget and sticking to it is the best way for you to save money while you are already in college. Do all this and raising money for college will be a lot easier!
4. Sell all your extra stuff online to raise money for college
After receiving your acceptance letter, you can still raise some extra money by making an inventory of the things that you own. Get out of the closet all the clothes that you have not used for the past six months or so, as well as any collectibles or valuables that you might have acquired over the past few years. Sell them on Craigslist or eBay and use the funds that you can pool together for your future expenses at the college or university of your choice.
5. Work part-time while you’re studying to sustain your expenses
Finally, what better way to raise money for college than by working part-time? Before the first day of school, offer to watch kids, pets or go house sitting for neighbors, relatives or friends. This is an especially in-demand service during the holiday season, when parents usually scramble from one event to another so they’d rather leave their kids at home under the care of a sitter.
You can also check out part-time online gigs which you can work on at a part-time basis. Writing, logo designing, data entry and similar skills are required at such line of work, something which you can do to earn and add money to your college fund. You can even ask the local business owners in your area if they can take you on as a part-time employee.
Your college education is one of the most important things that you can invest on, so find ways to raise money for it prior to your first day at the university or college of your choice. Raise money for college, invest in your future and always remember that one should only buy the essential items!