Every parent dreams of offering their children the best education possible for a better future. This has even become more crucial, considering how complex and sophisticated the world is becoming. To secure and excel in their field of work, one needs to be highly educated and skilled. However, education doesn’t come cheap. The cost of higher education can put many families in financial distress. As such, most parents struggle or are unable to push their wards through higher education due to financial constraints. As a higher percentage of students rely on family support for college funding, such constraints can shorten their dream. So, this guide offers parents various options to explore to help fund their ward’s college. We will also look at some funding options prospective college students can explore. These options can help lessen or even eliminate the financial burdens on parents.
529 college savings plan
As a parent, you should have ways of saving for your children’s college education. You don’t wait until the time is near before you go searching for funds. One of the ways to do this is through the 529 College Savings Plan. This saving plan was purposely initiated to encourage early savings for future education. So, parents can start contributing towards their wards’ education very early. This saves you from financial stress when college tuition is due.
Reverse mortgage
If you are 62 years and above and own a home, you can take a reverse mortgage loan to help fund your ward/dependent’s education. A reverse mortgage offers homeowners to convert their home’s equity into cash. The good news is that you don’t lose your home until your demise or when you decide to vacate it. Also, you choose how to use the funds. Therefore, it can be a funding source for your child’s college education. With a click on https://reverse.mortgage/how-does-it-work, you can learn the ins and outs of reverse mortgages.
Private parent student loans
These educational loan facilities can be accessed by a parent on behalf of their dependent undergraduate student. However, the borrower is responsible for paying the loan. These loans are private funds not backed by a federal or state government. Financial institutions like credit unions, banks, and online lenders provide these loans. You may need a good credit score for a private parent student loan. That aside, you should have a stable income source to enhance your chances of approval. The lender determines the loan interest rate and mostly depends on your creditworthiness.
Parent plus loan
Parent plus loans afford parents an immediate need of money to fund their child’s college education with the needed help. The government-funded loan allows parents to borrow funds for tuition, accommodation, and other school expenses. The good news is that the loans have flexible payment terms and lower interest rates compared to others.
Funding options students can explore
Scholarship
Most colleges offer merit based scholarships, to the less privileged, talented, and brilliant students. Some businesses and organizations also have such slots in various colleges and are criteria-based offers. Students can explore such financial opportunities to lessen the burden on parents. Before applying to a university, check their scholarship offers and qualification criteria. If you meet such criteria, apply, and you may be lucky to have a half or full scholarship.
Grant
Some colleges, federal and state governments, businesses, and academic organizations offer needy students financial support through grants. Students must demonstrate that they are in dire financial need to have such access. You can research available grants and apply; if approved, you will gain much-needed financial support.
Student loan
Several governments offer student loans to needy students. In the US, you can apply for a federal student loan through the Department of Education. Prospective applicants must complete the Federal Student Aid (FAFSA) application. The loans are payable but offer low-interest rates with a flexible payment plan. Some of these loans are only paid after college when you get a job and start early salary.
Part-time work
As a student, don’t leave the burden of your college education solely on your parents. You can contribute by working part-time jobs. You can explore job opportunities on and off campus but ensure that your school and job schedules do not conflict. Whatever you earn can go into buying books and other expenses.
Conclusion
Funding a college education is no joke; early planning is crucial. You should plan by saving as much as possible into an educational fund. Parents should also be actively involved in their ward’s choice of college. This will help prevent spending money you don’t have because your child chose an expensive college. Students on the other hand, can take advantage of student loans, scholarships, and grant options. That aside, all the above funding options can be explored if you need money urgently to fund college. When taking a loan, ensure you’ve read all the terms and conditions to prevent later regrets.
