We did it! My senior high school senior said yes right school for him. With this particular milestone behind us, we can now look forward to the post-acceptance stage of college financial planning. That’s happens after you’ve received your financial-aid package before your student begins classes. The fact is, there are still many factors that determine whether a student will come up short once the tuition bill is due.
Avoiding these common mistakes is essential to getting your student off to school with less anxiety and fewer unexpected fees. Here’s what we’ve learned, and also you need to know:
1. Plan for Cost Increases
Whether it’s fuel, medications, or perhaps the family Netflix subscription, cost is rising on daily expenses plus they can certainly blow a well-planned budget.
Since I don't have a crystal ball, and that i can't see what basics like gas will cost for any two-hour drive home for Spring Break, I have to plan in advance, adding a 15-20% buffer for that unknowns that may happen in the path of a college year. This is in addition to any year-over-year cost increases the school charges for that sophomore year and beyond.
2. Find out about Program-Related Expenses
There’s no way to actually know precisely what books and materials your student will need before they get their course syllabi. You should use the online bookstore search tools at most colleges to determine what books are required for the current term. These can change, however they do give a framework for if books will probably be used whatsoever or maybe you’ll need to buy three to four heavy textbooks that cost $100 or more.
You'll also want to browse the supply lists for a course, which can be available online via a quick search. Get in touch with past students (via school Facebook alumni groups) to determine what basic tools is going to be needed. Estimate a basic cost for books and supplies, then round up. This will prevent any surprises when fall term rolls around.
3. Obtain a Jump-Start on Summer Employment
We reside in a rural area where everyone is hiring. Not every summer jobs are an excellent fit, however, and also the great jobs fill up quickly. If you’re counting on your student working full time the summer before school starts, help them get in touch with employers how to see how their summer hiring works. Do they prefer returning students over new hires they have to train? Is there a method to have your son or daughter do a part-time job on nights or weekends to secure some of these better opportunities?
Get a feel for jobs that will help your student meet their summer savings goals. It could seem like a little amount, but a job with a $2-an-hour wage difference could equal to $800-1000 more within their banking account when school starts.
4. Figure Out the “How” of College Financial Planning
It seems pretty straightforward, right? The school tuition bill comes due, and you pay it. However this is something in which you would like to get in to the nitty-gritty of how payments work. We're trained to use tools like debit and credit cards to pay for things, even if we have cash – mainly because they're so convenient.
The the fact is, should you take out the plastic in your college financial aid office, you'll get hit having a 2-5% fee for what the charge card processors charge the college (and they kindly pass along for you). This could translate to extra costs of between hundreds to thousands of dollars.
If you select a repayment plan option, inquire about the way the plan works. For instance:
- Do you pay a one-time fee? Or is there a fee every month they process a payment?
- Does the charge vary by payment method (ACH withdrawal vs. your student bringing them a cheque every month)?
Now it's time to ask these questions.
5. Expect Changes in Your Personal Lives
I’m one of those parents who try to view life from every angle, figure out every possible scenario, and plan accordingly. One mistake produced by the most prepared parents thinks about the problem this primary year sets the stage for each year. The truth is, we don’t know what’s ahead so we have to plan for the known unknowns. Call it insurance of sorts. Here are some “what ifs” to consider:
- What if my student changes his major?
- What if my student’s GPA changes?
- What if my family income drastically changes?
- What in the event that “renewable” scholarship is no longer offered at my school?
Any one of these future scenarios can often mean we’d have to come up with a large amount of money really fast. While I don't love to think about it, my loved ones has discussed ways we're able to complete the gaps if one of our grants or scholarships changed. We’ve discussed working more, cutting costs in other areas, and just what it would take to cause my son to need to leave school and consider another education path.
It’s not too I love to obsess with this stuff, however i know that we must have a line. I understand it’s not sustainable to mortgage my house and remove our savings for my one child since i have four more waiting to go to college soon. By determining our boundaries, even just in this case with a school we love, we’ll be better ready to tackle things without too much emotion along with the needs of our whole family in mind.
The Worst College Financial Planning Mistake?
Procrastination may be the biggest college financial planning mistake, and many families are guilty of it to some degree. Looking back, I’ve made my share of mistakes with regards to getting ready to purchase college. We could have begun standardized testing early or put more money in our state’s 529 college savings plan rather than a high-interest-rate savings account. I could have thought much more about how tax planning and our family’s Adjusted Gross Income (AGI) affected federal student aid and other government funds.
That said, since i have can’t undo yesteryear, I can plan better for future years. These post-acceptance college financial planning mistakes don't have to be mine. They certainly don't have to be yours, either.