 | Decide if you're saving for public or private college.
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| | Get the current average annual cost of private versus public school.
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| | Determine what college will cost when your child is ready to attend.
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Set up a timeline for saving:
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| | Determine how long you have before you need to shell out cash for tuition.
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| | Figure out how much you have already saved and how much you still need to put away to meet that objective.
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| | If you don't have one already, establish an investment philosophy and determine a financial strategy that works for your family.
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| | Consider hiring a professional financial advisor.
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When college is more than 15 years away:
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| | Consider opening an Education IRA.
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| | Consider setting up a custodial account for minors.
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| | Think about investing in aggressive mutual funds.
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When college is ten to fifteen years away:
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| | Look into prepaid tuition plans.
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| | Look into state-sponsored college savings plans.
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| | Begin to stabilize your financial portfolio.
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When college is five to ten years away:
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| | Move a portion of your investments into fixed income or bonds.
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When college is five years or less away:
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| | Move your child's college money into more conservative investments.
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When it's college time--tax breaks:
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| | Look into the Hope Credit.
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| | Look into the Lifetime Learning Credit.
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| | The Hope Credit and The Lifetime Learning Credit are mutually exclusive. Parents must choose one or the other for each student; they both can't be claimed at the same time.
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| | See if you qualify to take a tax deduction on the interest paid on your child's student loan.
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| | Consider withdrawing funds early from your traditional or Roth IRA and taking a penalty waiver.
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When it's college time--parent loan:
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| | Look into the federal Parent Loan for Undergraduate Students (PLUS).
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When it's college time--financial aid:
The main types of financial aid are loans, grants and scholarships, and work/study programs. The majority of financial aid comes through the U.S. Department of Education—nearly 70 percent of all money given—mostly in the form of loans. The rest comes from a combination of federal or state grants and programs, from the universities themselves, and from corporations, foundations, professional and service organizations, and community groups.
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| | Fill out the Free Application for Federal Student Aid (FAFSA) form.
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| | ClubMom's checklist Helping Your High Schooler Find the Right College has helpful financial aid information.
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When it's college time--student loans:
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| | If your child qualifies for a Federal Stafford Loan (which gives students a break on loan interest payments), factor this into your financial planning.
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| | If your child qualifies for a Perkins Loan, factor this into your financial planning.
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When it's college time--grants and scholarships:
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| | If your student qualifies for a Federal Pell Grant, factor this into your financial planning.
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| | If your student qualifies for a Federal Supplemental Educational Opportunity Grant (FSEOG), factor this into your financial planning.
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| | Look into the Leveraging Education Assistance Partnership (LEAP) program.
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| | Find out about money available directly from the college and universities to which your child is applying.
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| | Find out about special interest groups and organizations that supply cash for college.
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| | Beware of scholarship search firms that promise you scholarship money for a fee.
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Work/study programs:
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| | If your child qualifies for a work/study program, factor this into your financial planning.
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Alternative approaches to financial aid:
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| | Consider reducing the cost of college by having your child start out at a community college.
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| | Consider having your child apply for a four-year U.S. Army ROTC scholarship.
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