A lot of American families are being burdened by the rising cost of college. That's why it is important that students and parents have a solid plan for higher education.
It was previously reported that U.K. parents should brace themselves for higher university costs. Data from the Student Loans Company (SLC) revealed that there was a "hidden" rise in the amount that parents are expected to set aside for their child's higher education.
Some parents are facing a 27 percent increase from last year's rate. This means that a lot of families will be paying hundreds more a year.
U.S. News shared 10 tips that can help parents plan for their child's college education. Experts believe that planning for college in advance can help reduce stress especially when parents are faced with hikes in student loan interest rates or tuition.
1. Open a college savings account. A 529 college saving account is tax-advantaged and is a good way to invest for higher education with tax-deferred earnings and tax-free distributions on relevant expenses.
2. Create a budget. After creating a savings account specifically for college expenses, make sure that you make a plan as early as you can.
3. Spend money on your child. Investing in his or her talent can help pay for college in terms of scholarships or other financial aid.
4. Set aside money each month. Automatic deductions every month toward your college savings account can help a lot.
5. Do your own research. Different institutions have different costs. You and your child should know which college or university is best for your needs.
6. Let your child contribute. Allowing them to give money for their education is a great way to teach them to value it.
7. Be knowledgeable about financial aid guidelines. Understand these policies so that you will know whether your child is eligible for a certain aid or grant.
8. Use tools. There are tools online, created by universities, such as net tuition calculators that can help you create your college savings plan.
9. Ask for help. It was noted that about 15 percent of families receive funds for college from extended family members and friends.
10. Be ready with a life insurance plan. Commonly, the primary source for college funding is the personal savings account. However, a family would benefit from a life insurance plan if ever it loses its primary breadwinner .
