Saving and Schooling Options: Tips to Guide You through College Decisions

The prices at four-year colleges and universities, especially private ones, are daunting to most people. So, you should absolutely, positively look around, inspect, and compare to see what you’re getting for all that money.
Increasing numbers of alternatives to traditional four-year colleges offer students lower-cost and shorter-term programs. Take some time to find out and consider what’s out there and compare those options to the best traditional colleges you’re considering.
Raising children is a long-term and costly endeavor. So, get your personal finances in top shape to run this financial marathon. You should also understand how colleges set prices based upon your financial situation, as that may impact how you save and invest your money.
As your kids grow up, be sure to expose them to important money lessons, including helping them to make the connection between working and earning money.
A challenging and rewarding part of raising kids is helping them recognize and develop their talents and abilities. Be careful not to steer them in a particular way thinking that may make them more attractive to certain colleges. More often than not, such perceptions aren’t correct. Teach your kids the value of hard work, integrity, and developing their strengths and interests.
There’s no substitute for visiting and investigating colleges and other programs of interest. Set aside time with your teen to discuss a process for checking out schools and what factors — including the cost and expected benefits — will influence the final selection.
Where appropriate and cost-effective, enlist experts to help with evaluating and applying to colleges. Understand the strengths and limitations of school-based counselors and outside experts. Spending lots of money won’t necessarily lead to better outcomes.
Understand how colleges collect and evaluate your personal and financial information to decide how much to charge you.
Four-year colleges are certainly one of the most popular options for high school graduates. But there are others including community colleges, trade schools, apprenticeships, boot camps, last-mile programs, and more. Visit schools, take tours, ask lots of questions, and do your homework on each.
Generally speaking, parents will be better off regarding financial aid applications and college pricing if they save and invest in their own names (as opposed to their kid’s) and take advantage of retirement savings plans.
Financial aid forms can be intimidating and tedious to complete. Understand how to complete those forms accurately and to your best advantage.
Colleges are the biggest purveyors of grants and scholarships — which are really a reduced price offered to those deemed in need of financial aid or displaying academic or some other merit (for example, sports). While some outside scholarships are significant, most are relatively small in amount and often reduce the amount of aid a given school will provide your family.
Ideally, your teenager will gain acceptance to multiple schools, which enables comparing the value (price and quality) offered by each to one another. You should also realize that you may be able to improve upon the financial aid offered by a given college.
Conduct more due diligence before making your final decision, which should include more campus visits.
Federal and state tax codes include numerous tax breaks for college expenditures. Find out what’s out there so you can take advantage of what you’re eligible for.
Getting through college in a timely fashion can greatly reduce your costs of attendance. Be sure you understand how to evaluate your likelihood of completing a given college program in four years.
As your teenagers enter young adulthood, be sure you’re sending them off with the financial skills and knowledge they can use and benefit from for the rest of their lives.
Know how to best deal with student loans. In addition to keeping track of them, be sure you’re aware of the myriad programs that help reduce your interest costs and repayment.

Praise for Eric Tyson

“Eric Tyson is doing something important — namely, helping people at all income levels to take control of their financial futures. This book is a natural outgrowth of Tyson’s vision that he has nurtured for years. Like Henry Ford, he wants to make something that was previously accessible only to the wealthy accessible to middle-income Americans.”

— James C. Collins, coauthor of the national bestsellers Built to Last and Good to Great

“Personal Finance For Dummies is the perfect book for people who feel guilty about inadequately managing their money but are intimidated by all of the publications out there. It’s a painless way to learn how to take control.”

— Karen Tofte, producer, National Public Radio’s Sound Money

“Eric Tyson … seems the perfect writer for a …For Dummies book. He doesn’t tell you what to do or consider doing without explaining the why’s and how’s — and the booby traps to avoid — in plain English… . It will lead you through the thickets of your own finances as painlessly as I can imagine.”

— Chicago Tribune

“This book provides easy-to-understand personal financial information and advice for those without great wealth or knowledge in this area. Practitioners like Eric Tyson, who care about the well-being of middle-income people, are rare in today’s society.”

— Joel Hyatt, founder of Hyatt Legal Services, one of the nation’s largest general-practice personal legal service firms

“Worth getting. Scores of all-purpose money-management books reach bookstores every year, but only once every couple of years does a standout personal finance primer come along. Personal Finance For Dummies, by financial counselor and columnist Eric Tyson, provides detailed, action-oriented advice on everyday financial questions… . Tyson’s style is readable and unintimidating.”

— Kristin Davis, Kiplinger’s Personal Finance magazine

“This is a great book. It’s understandable. Other financial books are too technical and this one really is different.”

— Business Radio Network

More Bestselling For Dummies Titles by Eric Tyson

Investing For Dummies®

A Wall Street Journal bestseller, this book walks you through how to build wealth in stocks, real estate, and small business as well as other investments. Also check out the recently released Investing in Your 20s and 30s For Dummies.

Mutual Funds For Dummies®

This best-selling guide is now updated to include current fund and portfolio recommendations. Using the practical tips and techniques, you’ll design a mutual fund investment plan suited to your income, lifestyle, and risk preferences.

Personal Finance in Your 20s For Dummies®

This hands-on, friendly guide provides you with the targeted financial advice you need to establish firm financial footing in your 20s and to secure your finances for years to come. When it comes to protecting your financial future, starting sooner rather than later is the smartest thing you can do.

Home Buying For Dummies®

America’s #1 real-estate book includes coverage of online resources in addition to sound financial advice from Eric Tyson and frontline real-estate insights from industry veteran Ray Brown. Also available from America’s best-selling real-estate team of Tyson and Brown — House Selling For Dummies and Mortgages For Dummies (with Robert Griswold).

Real Estate Investing For Dummies®

Real estate is a proven wealth-building investment, but many people don’t know how to go about making and managing rental property investments. Real-estate and property management expert Robert Griswold and Eric Tyson cover the gamut of property investment options, strategies, and techniques.

Small Business For Dummies®

This practical, no-nonsense guide gives expert advice on everything from generating ideas and locating start-up money to hiring the right people, balancing the books, and planning for growth. You’ll get plenty of help ramping up your management skills, developing a marketing strategy, keeping your customers loyal, and much more. And, find out to use the latest technology to improve your business’s performance at every level. Also available from co-authors Eric Tyson and Jim Schell, Small Business Taxes For Dummies.

Paying For College For Dummies^®

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

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Library of Congress Control Number: 2020904217

ISBN 978-1-119-65147-5; 978-1-119-65148-2 (ebk); 978-1-119-65149-9 (ebk)

Paying For College For Dummies®

To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Paying For College For Dummies Cheat Sheet” in the Search box.

Introduction

Welcome to Paying for College For Dummies! I know this may be a stressful and challenging topic. But, not to worry! You’ve come to the right place — this book will help you to lower your anxiety, increase your knowledge, and take control of the process.

In this book, I emphasize these important topics:

Making the most of your finances and developing your children’s potential without breaking the bank.
Getting the best education at an affordable price. Spending more doesn’t equate to getting a better education or better employment prospects. You should look for value — meaning seek out service providers that deliver quality at a reasonable, or in some cases even an attractive, price.
Understanding proven alternatives to traditional and costly college education. Increasingly, high-cost, four-year colleges are seeing their enrollment squeezed while far lower cost and faster alternatives to college are seeing enrollment growth.
Navigating and making best use of financial aid. After baring your financial soul to colleges, they will tell you how much they will charge you. They aren’t actually giving you money when they award aid so much as they charge different customers widely differing prices based upon the college’s assessment of your ability to pay. I help steer you through understanding the various ways to get better pricing as well as filling out all those forms.

About This Book

College price increases, for too many years and decades, outstripped the general rate of inflation. While particular degrees from leading schools do still seem to provide a ticket to some well-paying jobs and careers, now more than ever families are questioning the value of a college degree. A recent Wall Street Journal poll found that 47 percent of Americans no longer believe that having a college degree will lead to a good job and higher lifetime earnings. Among Millennials, only 39 percent continue to believe in college.

Paying For College For Dummies helps you to sort through the range of post-high school options, including attending a traditional four-year college. If you think buying a car or a home was complicated, just wait until you begin to understand the intricacies of how colleges set their prices. Colleges charge each of their customers different prices based upon their own (hidden) analysis of your supposed ability to pay. I will explain how various colleges determine what to charge you and how you can best complete college financial aid forms and position your finances to receive more favorable pricing.

As a former financial counselor, I have counseled thousands of clients on a variety of personal finance, investment, and spending decisions, including higher education and college. With four years at the “best” private colleges having broached $300,000, and the best public college educations costing well into the six figures, more and more people who aren’t wealthy are questioning the value that such an experience will provide. And increasingly, folks are wanting to evaluate and consider the alternatives, which this unique guide will also help you to do.

Foolish Assumptions

Whenever I approach writing a book, I consider a particular audience for that book. Because of this, I must make some assumptions about who the readers are and what those readers are looking for. Here are a few assumptions I’ve made about you:

You want the best for your kids and would like to understand the pros and cons of different options before making an informed choice. (Note: While the vast majority of readers of this book are parents, I expect that some inquisitive teens are readers too — that’s great! For simplicity, please accept my apologies for choosing to write as if parents are the readers so that sentences like the one before this aside aren’t more complicated.) Because money doesn’t grow on trees and you’re not super-wealthy, you want value for your money and need to contain costs.
You have some understanding about the reputation of particular colleges but don’t know how that translates into post-graduation job and career prospects.
You’ve heard some rumblings from young adults and perhaps even your own teenagers about alternatives to college, and you’d like to know more about those options and whether they may make sense for your offspring. It’s not unusual these days for parents and teenagers to have different aspirations and expectations. I hope and expect my book to get both sides to see the other’s point of view and bring you closer to a happy agreement or compromise!
You’d like a more detailed understanding of how college financial aid, scholarships, student loans, and such works.

If any of these descriptions hit home for you, you’ve come to the right place.

Icons Used in This Book

Throughout this book, you can find friendly and useful icons to enhance your reading pleasure and to note specific types of information. Here’s what each icon means:

This icon points out something that can save you time, headaches, money, or all of the above!

Here we’re trying to direct you away from blunders and boo-boos that others have made when making college and other post–high school decisions.

Here we point out potentially interesting but nonessential stuff.

Look for this icon to find real-life examples of college decisions to help exemplify a point.

We use this icon to highlight when you should look into something on your own or with the assistance of a local professional.

This icon flags concepts and facts that we want to ensure you remember as you make your college and other post–high school decisions.

Beyond This Book

In addition to the content of this book, you can access some related material online. Head to www.dummies.com and type in “Paying For College For Dummies Cheat Sheet” in the search box to find additional tips.

Where to Go from Here

If you have the time and desire, we encourage you to read this book in its entirety. It provides you with a detailed picture of how to best make post–high school decisions to maximize your returns while minimizing your costs. But you may also choose to read selected portions. That’s one of the great things (among many) about For Dummies books. You can readily pick and choose the information you read based on your individual needs. Just scan the table of contents or index for the topics that interest you the most.