How to Send Your Kids to College without Getting into Debt

Scholarships

Scholarships are a surefire way to help students avoid debt while attending school. The amazing thing about scholarships is that there are so many out there. However, you have to do your own research and look into which ones you are eligible for and try to find low hanging fruit you could most easily qualify for. If you and your child are go-getters use this to your advantage and apply to as many scholarships as possible, the only thing you’ll lose is the time invested into the applications. You can apply through different colleges and universities but there’s also so many other scholarships offered by businesses and other unrelated organizations. These include but aren’t limited to: professional associations, local foundations, religious groups, civic groups, etc. On top of all this, there are also a multitude of private scholarships available as well. The more research and time you put into applying for scholarships the better off you’ll be.

Early Savings Plans

There are many early savings plans available to consumers as well, most commonly, 529 Plans, ESAs, and government savings bonds. Of these, all three have their benefits but 529 plans are arguably the most popular and advantageous since they grow free from federal and state taxes and also offer tax free rollovers to Roth IRA accounts. Additionally, contributions to a 529 plan from grandparents no longer count against financial aid and can help them avoid paying gift tax. So, this can help gifting family members lower their future taxable estate while also allowing them to send their family members to college. 529 plans offer a lot of flexibility and are a great vehicle for lowering tax and are also known as a great tool used by grandparents to help their grandkids attend university.

Financial Aid, Grants, & Work Study

Financial Aid and any assistance available via FAFSA will be a great help for many families looking to avoid unnecessary debt to help their children through college. Work Study programs are also a fantastic way to help students get some real-world experience while also avoiding debt obligations as they attend university. As far as financial aid goes, there are many local and state financial aid programs that you may not be aware of besides the free application with FAFSA. Almost every state has at least one grant or scholarship available to residents and many have a long list of student aid programs.

Making Up for Any Windfalls in Education Costs

If possible, you can opt to help your children by utilizing personal investments and traditional savings in order to make up for any windfalls in cash you or your child might have. Otherwise, many parents decide to liquidate some equity from their portfolios or sell other liquid assets they might have to help cover any other costs they might have missed. Selling off assets isn’t always ideal but if it can help you avoid interest payments on debt it’s something you should highly consider doing.

Student Loans as a Last Resort

Any parent that can provide an education for their children without relying on debt is to be truly commended. It’s no easy feat, especially given how astronomical today’s education costs are. If you can do this for your children that’s a wonderful thing. However, for those who cannot, student loans are still an option to help see you through this financial challenge.

It’s great to help send your kids to college whenever possible but without successful planning ahead of time, you can only do what’s within your ability and what’s financially feasible. For all those parents that have helped their kids, your actions are highly commendable.