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How to Pay For College

September 5th, 2016 at 01:28 pm

I put in a sell order today, which will happen tomorrow because of the holiday. I'm selling shares of my daughter's Educational Savings account. We have been using the money primarily for housing, because the tuition portion is easy for us to pay out of pocket.

The housing portion for the fall semester is $5,641. I sold enough shares to cover $4750 worth of housing. The remaining $891 will come from our pocket. I likely can save that much this month anyway, so might as well apply it to that bill.

The other portion of tuition and fees (after scholarships) is $3,288. We are paying this out of pocket too. Our savings account has built up over the last several months, so not a big drain at all.

I've come to realize that not having any debt of our own, and thus any payments we are obligated to, helps so much in being able to pay for college out of pocket. I know people with two car payments which are easily in the $450 range each. If one could avoid those payments that is $900 a month one could apply to paying tuition...that's 10,800 a year!

We had been saving $2000 a year for our daughter in this Educational Savings account. One cannot contribute to them after the beneficiary turns 18. After those contributions stopped, I still saved the money. I haven't actually made it a line item in the budget, but I'm starting to think that I will so I can see the money available and set aside specifically for college.

I also noticed that we spend less on groceries when our daughter doesn't live with us. It's hard to tell exactly how much, maybe $50 a week or $200 a month. We give her $100 each month for miscellaneous expenses right now, so we may have another $100 we can set aside each month. There may be other impacts of expenses without her living here, such as a few dollars saved when we go out to eat, or pay admission to the movies.

The act of saving something every month for college all these years did add up. But continuing to save has definitely helped limit the burden of needing to take out loans as we enter year two of college. And wow, not having any car payments or other loans sure helps too!

If you are in the thinking about how to pay for college. I would definitely consider that they money can come from savings, student's income, current cash flow (at the time of college), scholarships and then loans if needed. The money doesn't have to all come from the same source!

I think I mentioned in a past post recently, that we had likely accumulated $1500 in snowflakes this year so far. I haven't kept exact track so that is a rough estimate. I could have been making a point to set it all specifically aside for college. So think side gigs along with the other sources I mentioned above.

5 Responses to “How to Pay For College”

  1. monkeymama Says:

    So true.

  2. scfr Says:

    Very interesting. I don't have children, but do think about how my niece & nephew will pay for college. I think they will need to use all 5 of the money sources you mentioned. My wish for them is that the amount of student loans they incur will not be too much of a burden.

  3. Trying to get ahead Says:

    You are so organized CCF! Here in Florida, there is the Florida Pre-paid college program where the tuition rate is locked in the moment you open the account. We paid for DS1 and DS2. Besides tuition, you can also save for lab fees, and housing. We opted to pay direct to a savings account rather than the investment option.

  4. creditcardfree Says:

    @TTGA (not sure yet how to shorten your name!), that's a pretty good idea with the prepaid plan. With being in the military we just weren't sure where our kids would end up going to college. Not sure the states we lived in even have those as options.

  5. rob62521 Says:

    Your planning ahead certainly paid off! Bravo!

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