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Important Tips for Parents for Paying for College

By College Parents of America

Don’t assume you won’t qualify for financial aid.
This is far from the truth in most cases. Two-thirds (66 percent) of today’s students receive financial aid, so many families pay less than the college’s list price. Even families with incomes of more than $100,000 can qualify for financial aid, particularly at private colleges. In order receive financial aid, complete the Free Application for Federal Student Aid (FAFSA) form.

Don’t skip the FAFSA because you think your income is too large.
While you might not qualify for need-based aid, completing the FAFSA will allow you to borrow as much money as you need through unsubsidized Parent PLUS Loans and unsubsidized Stafford Loans. Filing a FAFSA is often required for merit scholarships awarded by colleges.

Avoid liquidating important assets to pay for college.
Keep this mantra in mind: “I can always borrow for college, but I can never borrow for retirement.” Avoid tapping into your assets, especially retirement savings. If you find that you cannot pay for college out of your normal income and529 plan (if you have one), and the college’s financial aid is not enough, consider unsubsidized Stafford Loans, Parent PLUS Loans and private student loans to help protect long-term financial security.

When it comes to financial aid, the early bird gets the worm.
Financial aid is often distributed on a first-come, first-served basis. File the FAFSA as soon as it is available and make corrections as needed after filing. Do not wait until your taxes are done. Use the previous year’s tax return and provide best guess answers in order to secure your place in line. The federal government hosts a free service at, or you can pay for a professional advisor at

Whenever possible, “bundle” your kids in college.
Families with two or more college-bound students close in age should consider having them attend the same college at the same time. Multiple tuition bills can significantly lower the expected family contribution and potentially off-set the cost by taking a year or two off of tuition.

Have students contribute financially to their college degrees.
Students are the sole beneficiaries of a college education, so have the student do the initial round of borrowing. Facing the prospect of added debt with every year of post-secondary education may encourage your student to graduate in regulation time. Though federal loans allow for the deferment of payments, making a small monthly payment while still in school teaches responsibility.

Learn how to fund the gap in aid offered by your school.
The financial aid award letter you receive will spell out the grants, scholarships, work-study programs and federal student loans awarded to the student. Most families have to face the question of how to fund the gap – the difference between the financial aid package and the actual costs.

Research PLUS versus private loans.
PLUS loans are the responsibility of the parent. Although advantageously structured with relatively few credit requirements, parents with a good credit score may find that PLUS loans cost more than other private lending alternatives. Private student loans place the primary repayment responsibility on the student, but they usually require a co-signer. Check with your financial aid office or speak with private lenders such as Discover, SallieMae, Wells Fargo or credit unions to compare terms.

Other Money-Saving and Gap-Closing Tips
You can divide your estimated family contribution into monthly payments instead of making a large lump-sum payment. Interest-free tuition payment plans are available at hundreds of college campuses. Visit your school website for more information. Continue to apply for additional scholarships. Use commercial-free online services such as those offered by Do not pay for scholarship search services and remember to apply for the annual College Parents of America scholarship awards offered by Be careful when considering alternative financing. Given the recent decline in home values, home equity is no longer a reliable alternative. In a Wall Street Journal article, Jessica Silver-Greenberg warns “some families resort to riskier strategies to finance a child’s education, taking out certain kinds of loans — such as margin loans on brokerage accounts or passbook loans that allow parents to borrow against savings accounts.”


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Don Munce