When our children were born, back in the late 90s, we thought we were diligent by opening a 529 plan before they turned 1 and contributing to it on a regular basis. Back then, tuition at an elite school (like Stanford) was $20,490*, which many of us weren’t even aware of, but we assumed our attention to savings would get us to where we needed when it was time for our kids to go to college. We weren’t worrying about how to pay for college then, but maybe we should have.
Today, tuition at schools like Stanford, and many other private schools, range from the high $40,000s to the mid $60,000s. And tuition at state schools has also increased as significantly.
Figuring out how to pay for college is not easy. Don’t comfort yourself by avoiding the inevitable, especially by saying “We’ll worry about it after he gets in.” Understand why these 5 ideas, that parents think will help them pay for college, won’t. What will help is to start educating yourself on financial aid and college data BEFORE you and your child even put together a list of possible schools.
#1 We’re not saving so we’ll qualify for more financial aid.
This strategy assumes that colleges are going to punish those that save money and reward those that don’t. The thinking is that since families don’t have any money set aside for college, the colleges will have to increase their financial aid awards.
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