Dear Deborah

1 comment Posted on April 27, 2012

Expert Financial Advice

Dear Deborah,

We would like to send our child to college. What are some financial strategies and considerations to keep in mind as we plan ahead?

The sooner you plan ahead for your children’s college education, the more advantages you will have.

What Parents Can Do:

1. Minimize debt. This improves cash flow now for savings as well as during the college years.

2. Become familiar with the Free Application for Federal Student Aid (FAFSA). Parents can submit the FAFSA online at after January 1 of the student’s senior year in high school. This is the first step to obtain the Expected Family Contribution (EFC). Schools’ financial aid departments use the EFC dollar figure for financial aid packages. Cost of Attendance (COA) minus Expected Family Contribution (EFC) = Need.

3. Ask the college bursar about tuition installment plans. Many colleges offer payment plans that divide annual college payments over 9-12 months. There is usually an annual fee of $50-$100.

4. Start saving for college expenses.

Mark Kantrowitz, publisher of, says the 529 college savings plan is one of the best ways to save for college.
He states:
“These are tax-advantaged ways of saving for college, similar in concept to a Roth IRA and other retirement plans. Generally, you should invest in the state 529 college savings plan with the lowest fees, such as one run by Fidelity, Vanguard or TIAA-CREF. Use the direct-sold version, not the adviser-sold version, as the direct-sold versions have lower fees.

“All 529 college savings plans have conservative investment options, such as money market accounts and US Treasuries. Some even include certificates of deposit as investment options.”

What High School Students Can Do:

1. To become eligible for scholarships and grants, high school students should aim to do their best in school. As they work for a high grade point average, they can also complete advanced placement program (AP) classes. Sponsored through the College Board, academic college credit is given to students who do well in high school AP classes.

2. Strong SAT and ACT national test scores not only help students attend their college of choice, but help students qualify for more grants and scholarships at that institution.

3. Whenever possible, save for education. Set aside funds from monetary gifts and part-time employment. Scholarship committees and universities like to see that students expect to contribute.

4. Be flexible in a choice of a college or university. Financial aid, in the form of merit-based aid and need-based aid, varies from school to school. The second choice school may offer a better deal.

Having a quality college education increases the likelihood of better pay and career placement. According to Seattle Times Company, the U.S. unemployment rate for four-year college graduates is 4.8 percent, 5 percent lower than for high school graduates, who have 9.8 percent unemployment (1/18/11).

Copyright 2012 Deborah Nayrocker. All rights reserved. Permission to reprint required.

Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. An award-winning writer, she is a guest contributor with and a finance columnist with

Deborah is the author of The Art of Debt-Free Living and the Bible study Living a Balanced Financial Life. Her Web site is

If you have a financially-related question that you would like to ask Deborah, click here.


  • 10/06/2012
    Nazanin said:

    Beware of going outside of the celolge student loan programs for assistance. The financial aid people are there to assist you for a reason. The school wants you to attend and will do everything to help you finance it. The other kind-hearted appearing people who are willing to help you outside of the school system are out to rip you off. It is all a scam. Remember: If it is too good to be true, then it is too good to be true.


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