In our last post, we promised to give you a list of things you SHOULD do when thinking about what to spend and how to save money with college in mind. The wait is over! Here they are:
Things you SHOULD DO:
• Medical Plan
— It is recommended to keep your student on your medical plan while they go to college. Nothing is more expensive than a visit to the doctor that isn’t covered. Hopefully there will be no need for a hospital visit, but just in case, it is best to discuss which offices and doctors are covered with your student before they go to school.
— There are thousands upon thousands of scholarships available and not all of them are academic or athletic. Searching scholarships to apply for online can be very beneficial. Even small ones for a few hundred dollars can help offset the cost of books or general university fees. And if your student is granted a few small ones, the money really adds up!
• Test Out
— Credits are expensive. If you are proficient in a topic or course material, explore options to test out and receive automatic credit. Why pay for college credits if you can test out of it easily while in High School?
• Savings Account
— Open a savings account that gains interest. This is a good way to slowly make some money and to save money for an emergency or to pay off debt once you graduate. Credit unions are a good place to start because a lot of them have specific student accounts with special benefits.
• Student Discounts
— Always ask if stores and shops have student discounts before you purchase something. Usually places near universities will have deals and discounts for students that can produce a valid school ID.
• Pay Interest
— If you have to take student loans, it is best to start paying interest as soon as possible. Even putting $10 a month towards your loans will help lower your debt in the long run.
• Tax Credits
— Discuss with your CPA and apply for the following tax credits to help offset college costs.
– American Opportunity Tax Credit: credit for up to $2,500 towards tuition, fees and course materials available for the first four years of education after high school.
– Refundable credit: reduces the amount of tax you owe on a dollar for dollar basis. If the amount of the credit granted is more than what you owe in taxes, the left over will be refunded to you in either 40% of the credit or $1,000 depending on the situation.
– Lifetime Learning Credit: credit for up to $2,000 a year to cover tuition and fees for all years of education after high school including courses to gain or improve job skills. This credit is also available for graduate school tuition and related expenses.
— Even if you think your income is too high to qualify for federal financial aid, it is still a good idea to fill out the Free Application for Federal Student Aid (FAFSA). This form is required to be considered for financial aid and to maximize your opportunities. It can be used to determine eligibility for other scholarships and grants as well as for low-interest student loans. File as early as possible because some states give out grants on a first come, first serve basis until the money is gone.
— Even with all of these tips on how to save money on college expenses, it is still important to create a financial plan or budget for your student. Sit down and discuss realistic spending habits and financial responsibilities with them to ensure that everyone is on the same page about how to manage their finances.
We understand that college is expensive, and the cost is only climbing. At Mazur & Associates, Certified Public Accountants and Business Advisors, we have “been there” and our CPAs have successfully navigated through the trials and tribulations of our children’s college years. Take advantage of our experience and contact us to discuss some financial planning ideas that your family may consider before your student goes off to college. Schedule an appointment today by telephoning us at (732) 936-1230. And good luck to you and your student!