It’s common practice for financial experts to advise people to prioritize retirement savings over funding a child’s college education—good advice that’s not necessarily heeded by parents who feel a financial obligation to make sure Peanut gets the best education money can buy, even if it’s at the expense of their own retirement. But a new report shows parents may be changing their tune. A Sallie Mae and Ipsos survey of 2,003 parents with children under 18 revealed parents today are less inclined to sacrifice their own financial well-being to pay for their children's college education than in years past.
The poll indicates 59% of parents surveyed said college costs are a shared responsibility between parents and their college-bound children, up from 51% in 2016. The majority of parents (69%) said they wouldn't dip into their retirement funds to pay for college costs, up from 60% in 2016. However the parental instinct isn't completely dead, as more mom and dads said they were saving for college (56%) than for their retirements (54%).
How can families keep college costs down?
Parents and students need to make smart choices when it comes to higher education, given the average total cost of attending a public college is $25,290 (in-state) and $40,940 (out-of-state), and the average total cost of attending a private college is $50,000.
Price out your schools. When choosing a college, parents and students should use the US Department of Education's College Affordability and Transparency calculator to determine how affordable a particular school is. The calculator generates a report listing schools with the lowest (bottom 10%) and highest (top 5%) academic year charges for public, private (non-profit) and private (for-profit) colleges and universities.
Follow the money. Families should also consider applying to schools in states where students receive the most federal aid. The federal government provides more than $120 billion annually in grants, loans and work-study to nearly 12 million students.According to a ValuePenguin analysis, students in D.C. received more federal aid ($16,500 per recipient) than anywhere else in the country for the 2015-16 academic year. Students at schools in northeastern states received the most federal aid ($11,218 per recipient), while students in western states had the lowest federal aid ($9,876 per recipient). FAFSA applicants in New Hampshire were the most successful in being accepted for financial aid, with 74% of all applicants receiving student aid, in contrast to Alaska, where only 47% of applicants received federal aid.
Families need to fill out the FAFSA so that they can qualify for federal financial aid programs such as Pell Grants, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education (TEACH) Grants, Iraq and Afghanistan Service Grants, Work-Study and student loans.
Chase after every scholarship. Students should also do their part and apply for scholarships. High school counselors often have information about scholarships that students may qualify for. You can consult books that list billions of dollars in scholarships, prizes and grants. If you’d like to save money, check to see if your local library carries them. Also, you can browse scholarship, grant and prize listings online.