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Top 5 Mistakes Families Make When Saving for College

We all know college is expensive, but it's a lot less so when families are prepared ahead of time. Avoid these mistakes for better college financial planning.

Is it possible to attend college and graduate without student loans? Yes—I’ve helped many students navigate the financial process, and with a strategic plan, it is possible. But when it comes to financial aid and paying for college, what you don’t know will cost you! Here are the most common mistakes students and families make when saving for college.

1. Waiting too long to start saving—or having no savings at all​

Some families start considering college costs when it’s already too late. In reality, the best time to start planning for college is when your children are toddlers. You’ll face the reality of college when your student gets there. The strategy of having no college savings could benefit you if you’re a “need-based” family. If you have nothing to offer financially but your student has a strong GPA and a rigorous course load, colleges may meet 100% of their need. However, this becomes a huge problem if your student is just average academically. Colleges do not pay for average students; therefore, they may not receive any money from the college and will have to depend on government loans.

2. Not having a backup plan

Some families think they don’t need to save because they have plenty of money to pay for college. You may have the funds today—however, it’s smart to have a backup plan just in case your financial situation changes. If you have extra money to invest at the end of the year, there are safe places to secure your money for your student. There are also bad places to save your money that will hurt your student’s chances of getting scholarships and grants. Working with a professional who knows all the unique strategies that are safe for you and your student is important for the future.

Related: Parents, It’s Time to Communicate About College Costs

3. Putting money in the wrong savings accounts

Not all savings accounts will protect your student’s college money from the government. Working with a college financial planner is the best way to learn where your money is safe, which is why I recommend hiring a professional. An analogy I like to use is doing your taxes. You have two choices: You could do your taxes and pay what the bottom line says, or you could hire an accountant to advise you on the best strategy to pay the least amount of money to the IRS. The same is true when it comes to paying for college: You can choose where you want to save your money and maybe get a 1%–2% return, or you could hire a financial advisor who specializes in college financial planning. A specialist like this would advise you that there are many options for this situation. Knowing your options and having time to implement the best strategy is how you can send your student to college without student loans.

4. Not taking the PSAT or AP exams

If your student chooses not to take the PSAT, they could be missing out on a free or reduced education. Exceptional PSAT scores could lead to a National Merit Scholarship, and the test is great practice for the SAT, so it’s definitely worth taking. Similarly, if your student chooses not to take their AP exams, they may be giving up the chance for a free year of college—yes, you read that right: a free year of college at many schools!​ If your student takes enough AP exams and scores high enough, there are many colleges that will let your student enroll with college credit under their belt or even enter as a sophomore. This means you could save up to one year of college tuition.

5. Not taking college-level or dual-enrollment classes

If your student chooses ​not​ to take the most challenging classes available to them in high school, they’re choosing to give up potential money from colleges. Some of my students take online college classes while they’re in high school or during the summer months. This gives them a huge advantage if they get good grades in these classes. Colleges like to see rigor in a high school course load; if your student demonstrates that they can handle tough classes, colleges will want them. And if colleges want them, they will be offered money!

Related: How to Get Ahead in High School With Dual Enrollment Credit

Unfortunately, there are so many ways to make mistakes financially, and most of the time, it’s because families simply don’t know any better. But as mentioned before, you have options. Understanding financial aid and student loans isn’t easy for the average person. Hiring a professional who can help explain them will save you both time and money.

Find more great advice on parents and students working together through the college admission process with the tag “parents and students.”

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About Shellee Howard

Shellee Howard

Shellee Howard is a Certified Independent College Strategist, a best-selling author, and the Founder and CEO of College Ready and CR Tutoring and Test Strategies. She is also a member of the Higher Education Consultants Association and the Society of Financial Awareness. Shellee has traveled around the world helping students create their “Stand-Out Strategy.” She knows what it takes to compete in top-tier schools and find the best-fit college for all students. Shellee believes that no two students are the same and each student must have their own strategy and plan to be successful. Her focus at College Ready is to find the best academic-, financial-, and social-fit college for each student to thrive at and to help them graduate debt-free.


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