(BPT) - Right now, summer is in full swing for many families and planning for fall may seem far away. For parents with college-bound children, however, a time for new beginnings, transitioning and planning for the future is rapidly approaching. That’s especially true for families who are still determining the best way to pay for the upcoming school year — and which funding sources they will use.
A recent College Ave Student Loans survey of parents with undergraduate students, conducted in June by Barnes & Noble College InsightsSM, found 95% plan to help pay for their child’s college education. The most common sources of funding? Grants and scholarships, income and savings, and student loans.
The truth is, most families must explore every financial avenue to make sure their child has the resources he or she needs to move forward with a college career. If you have a child headed to college this fall, here’s a summary of the seven most popular ways parents help finance their child’s higher education, according to the survey:
1. Research all grants and scholarships
In the survey, of parents helping their child pay for college, 64% said that they currently or plan to use some form of grant or scholarship money — which does not need to be repaid. It’s not too late to look for last-minute scholarships, and not all require demonstrated financial need or a history of academic excellence. For instance, College Ave Student Loans gives away $1,000 each month as part of its scholarship sweepstakes program. Make sure you're fully investigating all possibilities for “free” college money as part of your process.
2. Set aside income and savings
Even though the survey shows 60% of parents plan to use income and savings to cover college costs, you’re far from alone if you haven’t been able to save up in these challenging financial times. The good news is that you can still make college funding a priority, especially if your child is just kicking off their education. You may have to make some tough choices, but you could see if it’s possible to cut expenses in your budget, sell off some unneeded assets, or ask loved ones to shift gifts toward college funding. Any amount can help chip away at a tuition bill.
3. Explore student loan options
More than half of families surveyed (53%) rely on student loans to help bridge a college financing gap. If your family may need to borrow, make sure to take out federal loans in the student’s name first as these come with low fixed rates and unique benefits, such as income-based repayment plans. Federal student loans have annual loan limits, and if you find you need additional funds, private student loans are one option to consider. Just be sure you shop around for a loan that fits your budget, like the flexible repayment plans available at College Ave Student Loans. Applying for help is easy with the three-minute application and great customer service.
4. Encourage your child to find work
Forty-three percent of the parents surveyed noted that their children will work during school (or have already worked) to help finance college. That’s often a sound plan, as it can motivate students to have a greater stake in the outcome of their education. For those families who filled out the Free Application for Federal Student Aid (FAFSA), federal work-study jobs may be available for your student.
5. Use your 529 savings plan
About 1 in 3 families (38%) plan to leverage a 529 savings plan to help pay for college. If you have funds in a 529 plan and have upcoming higher education expenses, you can set up a distribution from your 529 plan account into your own bank account. Money must be used for eligible college-related expenses, such as tuition, room and board, books and supplies, etc.
6. Consider a parent loan
Another possibility you may not have considered is to take out a loan yourself. Parent loans are an option for those with strong credit, and who want to and can take on the debt. When shopping for parent loans, consider private parent loans as some — such as those at College Ave — can save families money as they can offer lower rates and no origination fees as compared to federal options. Of those parents helping a child pay for college, 21% of those surveyed have or are planning to use parent loans.
7. Take on a side hustle
One more option for contributing financially to your child’s education? A side hustle. Taking on a secondary job or venture that generates additional income is a strategy employed by 18% of the parents surveyed. Depending on your time, energy and other commitments, you may be able to take on extra work as a way of earning the extra money needed to get your child the valuable education they need.
As fall approaches, you’ll want to make sure your child has everything she needs to get their college education off the ground. Take time now to plan your best strategy for taking care of the financial aspects, so you can enjoy those last few weeks before sending your student off to college. Learn more tips on planning and paying for college at CollegeAve.com.