Apply for financial aid.
“Many people think that they aren’t eligible. However, we urge all of our clients to complete a FAFSA form,” says Jonathan Gassman, a certified financial planner and owner of the Gassman Financial Group in New York City.
He’s referring to the Free Application for Federal Student Aid, which every parent of a college-bound teenager becomes well acquainted with. “Many universities and colleges offer general and special scholarships to students,” he says. “You really have no idea until you apply what you may end up with. Even though we had saved sufficiently for my eldest daughter, Hofstra University returned with a rich scholastic offer if she kept her grades above a 3.0.”
Don’t forget about grants. For instance, with the Federal Pell Grant, a student could be given as much as $5,730 for the 2014-2015 school year. How much they receive depends on factors such as the student’s financial need and the cost of the school.
Put extra money toward college. Someday you’re going to stop buying diapers or paying for day care. That money could go toward your college savings plan, says Mark Kantrowitz, senior vice president at Edvisors.com, a website focused on planning and paying for college, and co-author of “Filing the FAFSA.”
Beg grandparents. No need to grovel or embarrass yourself, but Seaton suggests encouraging grandparents and great-grandparents to give cash gifts for holidays, birthdays and high school graduation, which will be used to increase the college fund.
Use rebate programs. Upromise.com is one example. You shop with your debit or credit cards, which need to be registered at the site, and a tiny percentage of what you pay for various products and services will collect in a noninterest-bearing Upromise account. As the money accumulates, you can transfer it to a 529 plan or savings account.
Ask your kids to contribute. Even if your kids sometimes want to spend their birthday money, other times they should put it into the college fund. “They need some skin in the game,” Seaton says. Your child may be more willing to help than you realize. In late May, the College Savings Foundation released an online survey of over 500 high school students and found that 82 percent felt it’s their duty to help pay for college. Last year, 74 percent felt that way.
Negotiate. “I believe most schools are willing to negotiate because of the student’s unique ability and what they will bring to the table,” Gassman says. This is assuming the student has a lot to bring to the table in terms of grades and accomplishments. If you believe you have a case, it’s worth trying to negotiate with the financial aid office.
Get creative. If you have permanent life insurance policy, you could consider borrowing against it. “They may offer a discounted rate of interest,” Gassman says. Other options include tapping your 401(k) for a loan and taking out a home equity line of credit. But Gassman only recommends creative borrowing if your finances are secure and interest rates are low. “Remember, your home is on the hook,” he says of the home equity line of credit. Because while it’s great to help your kids go off to college, it’s also nice to have a home for them to come back to.