Budgeting for Your Child’s College Fund
Most parents want to set aside money should their child(ren) want to attend college, taking as much of the financial burden from them as possible. While scholarships are a fantastic award for your children to further their education, parents should never count on scholarships to pick up the bill. Here are 3 tips to help your Military Family face college costs head on:
1. Start saving from the very beginning
The sooner your family starts saving for baby’s future, the more opportunities they’ll be able to undertake. Attending their dream university and study abroad trips will all leave a huge positive impact on your child, should they be interested in these activities, and they all come with a hefty price tag. The sooner you start saving for these activities, the better! Costs are rising and the future is uncertain. You won’t know whether your child is interested in a 2-year program, a 4-year program, grad school and beyond for quite a few years after they’re born. Be prepared by saving as much as you can to enrich them as much as you’d like.
According to the National Center for Education Statistics, from the 2001-02 school year to the 2011-12 school year, prices for undergraduate tuition, room and board at public institutions rose 40% and at private nonprofit institutions it rose 28%.
2. Set realistic goals
It’s easy to save; but saving is a very blurry concept. Opening a savings account and adding money when it’s convenient or putting in $20/month really isn’t going to cut it in the long run if you want to pay for your child’s education, or at least make a dent in the bills.
The vast majority of parents in the U.S.A. feel that college is a positive investment that they want to make in their child’s future – so much so that they want to stretch their finances as far as they can go to be able to afford it.
Another reason to set high goals involves loans. Interest rates can come back to hurt students and their parents. Student loan interest rates can range anywhere from about 4.5 to 7.5%. No parent wants their child to start their adult life and career journey in debt.
Based on the amount you’d like to save for your child’s education, break that number down into monthly increments you should save in order to reach your goal by the time your child is old enough to enter college.
3. Take advantage of the perks of being a part of a Military Family
If your service member is eligible for the post 9/11 GI Bill, you have 36 months of benefits to use or transfer (the 36 months is designed to be 4 years of school with 9 months for each school year). You can divide that among any dependents.
It is important to note that once you transfer the benefits you cannot transfer them back. So better to transfer only the months that you know your child will need at first.
You apply to transfer benefits with DoD at the MilConnect site with your CAC card. Once the DoD approves the transfer, your child can log on to the VA eBenefits site and apply to use those educational benefits.