Start saving early to lessen the burden later. More in savings will probably increase your Expected Family Contribution (EFC), but that increase is usually outweighed by the amount you can save and put toward college. Putting those savings in the parents' name is usually a better idea than in the student's.
The average amount of parental savings expected to be put toward college each year is 5-6 percent. For a student, that number jumps to between 20 and 30 percent. So it is better to put away savings, which are already earmarked for school expenses anyway, in the parents' name.
You will find it much more efficient to start saving early and put that toward tuition costs rather than taking out more in loans or borrowing against credit. Save what you can and then fill out your federal student loan applications. This results in a better financial situation with less debt. Then paying back the loans you do take out will be easier when you graduate.
|Jennifer Mathes, Ph.D.|