Saving for College

As students across our community have started back to school, thoughts may be turning to a little further down the road.  What happens when that student is ready to go to college?  Will they have the funds to pursue the education they desire?

Saving for college or higher education is important.  It can also be something that seems intimidating or prohibitive.  However, there are some key strategies you can implement now to help you along this journey.

When should you start saving for college?  Whether this be for yourself, your child or grandchild, the answer is the same.  Start saving as soon as you can.  Every dollar you can contribute now is one less dollar you will need to borrow later.  Time is one of your most valuable assets – the sooner you start saving for college, the more time your money will have to grow.

How much do you need to save for college?  College tuition is not one-size-fits-all.  Ultimately, your savings goal will depend on your circumstances.  Consider whether you want to attend a public or private school.  Will you be completing a two-year or four, or more, year program?  Many websites such as College Board’s Big Future site can help you estimate the real price you’ll pay for any college.  Keep in mind that any scholarships or other financial aid you may receive will help you pay less.  Keep your savings goals realistic, taking into account how much money you are bringing in and how much time you have before those funds are needed.

As you, or your student, are in high school, look for ways to reduce your future college bill.  Many schools now offer Advanced Placement (AP) classes, dual credit courses or International Baccalaureate diploma programs where students can start earning college hours early, often at a reduced rate.  Gaining college credits while still in high school, students can graduate college faster, spend less money and position themselves for success.

When the time comes, seek out scholarship or grant opportunities.  According to Sallie Mae, over one-half of all U.S. college students received financial aid through scholarships in 2021.  This type of aid allows you to minimize the overall cost of your education and take less out of your savings.  To learn whether you qualify for low-interest federal student loans or available federal grants, make sure you fill out the Free Application for Federal Student Aid (FAFSA).  The FAFSA form is not only used to determine how much federal financial aid a student may be eligible for, but many schools also use the form to determine eligibility for their scholarships or grant assistance programs.

Tools to help you save for college can range from basic savings accounts to a 529 plan or other savings vehicles.  Through your relationship with Austin Bank, you have access to financial advisors who can work with you to determine the best option for your situation and goals.  Or, you can speak to your local Customer Service Representative to open a savings account, certificate of deposit (CD) or Coverdell Educational Savings Account.  Account requirements will differ depending on the type of account you choose.

Funding a college education is a large task, and we at Austin Bank are here to help.