3 Things Your Financial Planner Won’t Tell You about Paying for College

Financial planners are an excellent resource for retirement planning, investment advice, and portfolio

management. But because college planning is such a multifaceted process with many non-financial

aspects, it can have a real impact on your finances that you financial planner might be blind to.

The following are three things your financial planner won’t tell you about paying for college.

 

529 Plans aren’t Always the Best Choice

In order to have enough money to pay for their child’s education, one family sold off some valuable

assets and put the money into a 529 account on the advice of their financial adviser. What they didn’t

realize was that their income would have qualified their child for financial aid.

Then, because they had so much money in the 529, their expected family contribution was much, much

higher and their child no longer qualified for financial aid.

 

Also, because a 529 is specifically for education it can only be used for that purpose. So when their child

changed his mind and decided to go to a two year college instead of a four year, they didn’t need as

much money as they had previously thought. Because they had all of their money tied up in the 529,

they had to pay penalties to get the money out and use it for other things.

 

High School Achievements Can Pay Big Dividends

College expenses can be significantly impacted by what your child does in high school. Their GPA, test

scores, extracurricular activities, and even which classes they take can determine how much or how

little your college costs will be.

 

For example, if your child takes AP classes and scores well on the exams, this can offset a significant

portion of tuition costs. Their GPA and extracurricular activities can qualify them for scholarships that

can take care of even more of those costs.

 

Early Career Exploration is Important

Different majors often take varying amounts of time to complete because they have requirements that

are specific to that major. For example, many science degrees can take longer to finish because of the

difficulty of the course material and the lab and research requirements. By determining early if your

child is interested in pursuing a career in the sciences, you can plan for the possibility of some extra time

at school.

 

This can also help you narrow your focus to the schools that offer those particular majors or have high

quality programs in that area of study. The schools that qualify will have a varying degree of costs

associated with them, and knowing these costs in advance will help you to more accurately plan your

finances.

 

Conclusion

When making decisions about how to fund your child’s education, make sure to take into account the

non-financial parts of the process that may help or hinder your finances. For help in developing a well-
rounded plan for your child’s future, schedule a consultation with The College Planning Source today.

College Planning Source

College Planning Source

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