HOW PARENTS CAN HELP

FINANCIAL PREPARATION

	Saving	For more details on helping your child prepare financially, read our Financial Tips section.
	Tax Benefits and Pre-paid Tuition Plans
	Borrowing

Saving

You should begin saving as early as possible. The average in-state tuition and fees for full-time undergraduate students for 2004-05, before student financial aid was deducted, was $5,986 for a public two-year college and $10,720 for a four-year public university. Private four-year schools averaged $25,204 in 2004-05.

(Source: National Center for Education Statistics, Higher Education General Information Survey.)

Many state governments now offer innovative college savings programs. The College Savings Plans Network (an affiliate of the National Association of State Treasurers) provides information about these plans and links from their Web site to the many state plans.

College Savings Calculator
Use this handy calculator provided by the U.S. Dept. of Education to determine how much you could or should be saving to meet college expenses, and how to maximize your savings efforts.

FinAid, an online financial aid resource, has a number of online savings calculators to help plan your savings and project your financial returns. They also can help you project college costs and student loan payments.

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Tax Benefits and Prepaid Tuition Plans

For more information on ways to help finance your child's education, including an education IRA, click here to visit our Saving Money for College page.

Borrowing

Another funding option is the Federal PLUS Loan program. Click here to visit the Financial Tips section of our site, where we describe PLUS Loans as well as other federal loans, grants, and work-study.

Other borrowing options involve leveraging personal investments or your home's equity.

More and more students and parents are using private loans or credit cards to finance postsecondary education. Because these types of consumer debt usually carry far higher interest rates than federal student loans, you should consider them a last resort. For information about sources of federal, state, and private financial aid, visit our Looking for Student Aid  page.

What about Tax Incentives for Education-related expenses?

The Federal PLUS Loan v. Home Equity Loans

The Federal PLUS Loan v. Cashing Investments

The Federal PLUS Loan v. Using 401k Funds

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