Reaching Towards the Future: Never Make These 5 Costly Mistakes If You’re Saving for College
As everyone knows, receiving a college education is not cheap. According to the National Center for Education Statistics, the approximate total intuition of the average 4-year American institution from 2015 to 2016 was $26,120 while it was just $12,052 from 1985 to 1986.
Due to the hefty expenses of colleges and universities, many struggles to make ends meet, even with financial aid, scholarships, and/or grants. This is why many ties eating ramen noodles and having zero dollars in the bank with college: because these factors often do apply to actual college students.
But before you consider college out of the picture, it’s important to reflect on your current spending and saving habits. Avoiding the following mistakes can help you when it comes to saving more money for you or your child’s college education.
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Assuming financial aid will cover all of the costs
Federal student aid from military aid to tax benefits can definitely help one pay for their college tuition and other expenses. However, most forms of financial aid don’t cover all of the expenses at hand. Unfortunately, this comes as a surprise to many folks once they or their children begin going to college.
What’s even worse is that financial aid payments are often delayed, leaving students no choice but to either pay upfront for their tuition costs or pay late, risking getting kicked out of their classes if they don’t pay by the due date or having to pay late payment fees.
The point is, saving even if you think financial aid will cover you or your child’s education is important. Apart from never relying on financial aid alone, it’s important to also never assume you will qualify for financial aid from the start. That said, it doesn’t hurt to save extra money just in case.
Waiting to start saving for college until the last minute
Waiting until it’s time to go to college is not the right time to begin saving. While not every child is lucky enough to have parents that begin saving for their college from the time they are born as not all parents can even afford to do such if you currently have children you are saving money for, for higher education, start saving now, even if you only have pennies.
Even with a middle- or upper-class income, it’s important to not take one’s current financial situation for granted. Financial troubles may arise in the future, making it difficult to begin funding college when it is actually time for it.
Plus, when one saves little by little for college, there are fewer upfront costs when it’s time for college as money will already be stowed away, and it will seem like they are paying less. By the time one enters college, the ideal situation would be that they have at least one-and-a-half of the average college tuition saved up.
Depending on grants and scholarships
Before even getting into college, everybody may believe qualifying, let alone receiving, a grant or scholarship to help pay for college will be easy. Sure, there are a plethora of scholarship and grant applications online that are quick and easy to apply for. Some applications don’t even require one to have a high GPA or low income. But receiving one is easier said than done.
The sad truth is, so many individuals apply for scholarships and grants, making them a competition just to receive. For that reason, never expect you or your child to receive the latter, even if with straight A’s and a long list of volunteer experiences and extracurricular activities.
Seeing grants and scholarships as rewards, as they should be considered, is the best mindset to have rather than seeing them as things that are guaranteed. Even if a scholarship or grant is received, continuing to save up money for education is a great idea in case tuition rises, more classes need to be taken than expected, or there isn’t enough funding for college supplies.
Applying for the wrong loans
While for many, it’s necessary to apply for student or personal loans to pay for the high expenses of college, there is such a thing as making loan mistakes. For instance, applying for loans with high interest rates, failing to pay back your loan within a timely manner, and failing to understand how much your monthly repayments will be our mistakes some might make.
If you’re new to loans, make sure to ask a trusted family member or friend who has experience with them, or do your research online. The more you understand about selecting the right loan for your needs and what you can afford, the better your borrowing experience will be, and thus, the less debt you will rack up going to school or sending your child to school.
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Going to the most expensive college or university
While it’s always a great feeling to get into a top-ranked institution, what doesn’t make sense is when those who can’t afford to go to those institutions or who don’t require going to those institutions for the degree they are seeking, attempt to go anyway. While it looks nice on their resume, they won’t be paid more for going to that top-notch institution when applying for a job.
The takeaway is, if you cannot afford to send yourself or your child to an overpriced college or university or if they can get their degree just about anywhere else for a fraction of the cost, going for the more affordable educational option isn’t always as bad as racking up higher debt than you can handle.
Saving for college may seem self-explanatory. But from different ways to save money for college to alternative college education funding methods such as scholarships and financial aid, it can be difficult to know if one is saving enough.
Some of the mistakes one will want to avoid when saving for college either for themselves or for a loved one include assuming financial aid will cover everything, waiting too long to start saving, depending primarily on scholarships and grants, applying for the wrong loans, and attending the most expensive college or university. While education is important so are our finances.
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