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College Planning

3 phases of finding money for college

Preparing to pay for a college education doesn't have to come from one bucket of money. By approaching fundraising efforts in three phases, you may be able to accomplish your goals.

We understand finding money for college can be an overwhelming and scary experience! While the costs of college are high, there are many college funding plans of attack. It can be helpful to break your college funding strategy into three phases as follows: 

Phase 1: Start saving for college early

  • Know how much to save for college. Even if your kids are a long way from high school graduation, there are tools that let you plan for the expense of college in future years.The US Department of Education's college affordability and transparency center lets you list colleges by different criteria, then list their stats such as average costs and graduation rates.'s college cost calculator. will let you plan for the cost of your chosen college based on inflation, and the amount of your own savings.
  • Choose a college savings vehicle. There are many ways to save for the future including money market accounts, UTMA accounts and more. 529 plans let you start saving tax free for higher education costs with low minimum contributions. They offer a variety of investment options to start saving right now, without much impact on your budget.

Advantages of 529s include:

  • Low minimum contributions (some plans do not have minimums).
  • Tax-exempt withdrawals when used for qualified higher education expenses.
  • Option to change the funding beneficiary to another family member.
  • Ability to retain complete control of the money, though if you elect to use it for other purposes it may be subject to taxes.
  • NOTE:  As of 2018, the IRS has amended the term “qualified higher education expense” to include a limited amount of annual expenses from a 529 Plan for tuition at an elementary or secondary public, private, or religious school.  Source:
  • Start early and automate your college savings plan. Put the power of compounding interest to work for your family by starting a college fund while your children are young. It's easier if you set up an automated monthly deduction.

Phase 2: Search for financial aid

  • Research scholarships and grants. These are one time payments that students can be awarded for academic excellence or demonstrated financial need. Though they don't have to be paid back, “full rides” are rare. Click here for a list of potential college funding sources.
  • Consider student loans. In fact, college is a great way to get your kids started on the road to good credit. Your college of choice will have a financial aid department that can walk you through the options in detail. Federal loans are offered by the US Department of Education and come in flavors that can either pay out directly to the student, or partially to the student's parents.
  • Mind the financial aid timelines. Stay on track by checking out our Countdown to Financial Aid infographic

Phase 3: Control cash-flow throughout college

  • Set smart spending expectations. Encouraging healthy spending habits and budgeting doesn't just save money in the short-term, it sets your kids up for a fiscally responsible adulthood. There are a lot of ways to save, and some of them require a little extra effort.
  • Minimize transportation costs. Don't assume that your child needs a car at school. Gas and car maintenance add up quickly. Student bus passes and a good bicycle can save a lot of money, especially in large cities. Many colleges make a point of becoming transportation hubs, so check out the options.
  • Explore options for books. There are several options to purchase or rent used books inexpensively. Get acquainted with local used book stores, libraries, and e-book options. You can also purchase books from students who are one-year ahead.
  • Use campus resources. Many campuses offer meal plans, gym memberships, medical services, psychological consultation and assistance, even essay editing and note-taking assistance. Be sure to use the low-cost services available.
  • Look for part-time work opportunities. Many students carry a class load of 18 hours or less per week. They also need ample study time, but many still have room in their schedules to work a few hours each week. Encourage your student to investigate on-campus job and work study opportunities.
  • Send care packages around exam time. The more stressful things get, the more tempting it is for students to waste money on junk food, alcohol and entertainment. Well-timed care packages can curb some of this spending, and provide some much needed support.

Saving for college is a multi-year, multi-step process. Don't be daunted by the whole price tag, break it down and plan early.



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