Last-minute financial planning for college
Provided by RBC Wealth Management
and Dave Dupont
Climbing tuition costs have left many parents and kids feeling unprepared. But, there are steps you can take to do some last-minute planning on funding a child’s college education.
Financial Aid
The first step usually involves determining if your child qualifies for financial aid. It’s a process that takes many factors into consideration, including the price of the school and the number of children you have in college at the same time. One of the best ways to determine if you qualify is to submit a Free Application for Federal Student Aid (FAFSA).
Scholarships
College scholarships are “free money” but your child will most likely be competing with many other future students for these funds. After you’ve researched and applied for financial aid from grants, apply for scholarships to help pay expenses. Like grants, college scholarships are a form of financial aid that don’t have to be paid back.
Loans
As hard as many parents try, they will still probably need to rely on loans to help pay for college – especially if they get a late start on saving. While individual loan products vary, generally speaking the most desirable loans are awarded with financial aid in the student’s name and are subsidized by the government. In most cases, subsidized loans don’t accrue interest while the student is in school, and payments don’t start until after graduation. Unsubsidized loans can also be an option. These are also low-interest, but do not depend on financial need.
Secondary Relief
To attain some financial relief after the tuition bill is paid, look for educational tax benefits. Some of these benefits apply to students in their first two years of undergraduate schooling, while others are designed to help third- and fourth-year students.
It also may be worth asking your child’s school if a tuition installment plan is available. Instead of charging a lump sum at the beginning of the semester, the school may be able to spread out the bill over a nine-, 10- or 12-month period. Thousands of universities offer these plans. Typically, there is a small annual fee to participate (usually $50 to $100).
This article is provided by Dave Dupont, a Financial Advisor at RBC Wealth Management. RBC Wealth Management does not endorse this organization or publication.
RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC
