Supplementing a Declining College Savings Plan
Simple steps to help alleviate the financial burden
Last year, The National Center for Education Statistics reported that the average annual cost of attending a public four-year university was almost $20,000. Wisely, many parents have set up college savings plans to help their children pay for their education expenses, but when the underlying investments in a college savings plan start losing money or when returns decrease as distributions are taken, something needs to be done to help students continue their pursuit of higher education. Here are a few pointers to help you find (or create) a supplement to a college savings account. Apply for a scholarship or grant
There are so many different scholarships available to students, you never know which your student might qualify for. Some are granted by specialty groups, while others rely on grades or sports performance and some are small funds that simply require an essay for a student to be considered. Go to your student’s school’s financial aid office so you can investigate all the different options available.
Go to work
While it may not be ideal to have to work while in college, it isn’t impossible to balance a part- or even a full-time job and classes. It takes discipline and great time management skills, but if a student is determined to do well and take the necessary steps, the student will find success and can often find this experience rewarding and very helpful in the future. Many employers in college towns are very accommodating of class schedules, and some might even provide students with work experience that directly relates to their major’s focus. Check out the job board on campus to find especially accommodating employers who are used to working with college students. Check with the school to find out if there are any on-campus jobs available, such as working in the kitchen or the library, driving a shuttle, etc.
Another flexible way to work while going to school is to tutor other students. Students can tutor independently or through the school’s tutoring program. Students will also be able to choose the subjects and grade levels that they work with.
Reduce your spending
The less students spend each year, the less they need to take from their college savings plan. If your student is attending a local school, then moving back home or to a less expensive dorm can save a substantial amount that would otherwise go to living expenses, and reduce the amount of money spent on entertainment, clothing, and meals eaten outside the home or the residence hall.
Take out a loan
Low-interest private loans are generally available to students with parents able to cosign. While loans can be a great way to ensure that students finish their education and they often provide an easy repayment structure, it is important that students not treat the loan as a free-for-all and overspend. Everything borrowed must be repaid, starting soon after the student graduates.
A good education may not be a guaranteed ticket into a secure financial future, but it definitely gives a student a head start toward one. Don’t let a dwindling college savings account lead you to believe that your child won’t be able to get that diploma he or she has been working toward. Instead, start looking for alternative ways to supplement the savings before they are gone.