Students heading off to college will find that increasingly more institutions require that they make an expected contribution towards their education. Some colleges set a certain monetary amount which they expect the student to contribute, in addition to any self help received in the form of federal work study whilst at college. Most usually the expected student contribution is derived from a portion of savings and money earned through working in the vacations, though some colleges allow student loans to replace the work study element.
Regardless of how college is funded most families need to pay an expected family contribution which is meant to be a contribution from both parental income and from the student. More colleges are moving towards splitting this expected contribution into a defined student contribution.
Even where the student is not required by the college to make a direct contribution it still helps to have savings put aside to help with the everyday costs. This helps to avoid borrowing to the hilt with loans or credit cards.
A good option to save for college is to take a gap year and work. Students who have previous work experience are found to be more responsible at handling their finances in college. They will be able to offer valuable work experience when it comes to finding a college job, giving them the pick of the best on offer. Studies have shown that students who work whilst studying perform better academically than students that do not work during college.
The downside of taking a year off and working is the very likely possibility of increased college fees. If parental support is available it could be worth inquiring if the college of choice has an option of prepaying fees at a guaranteed set level. Students should definitely weigh up if a year out would be worthwhile or the benefit simply reduced by increased fees.
Savings can be put away towards college from an early age, thus allowing for compounded interest to accrue. Holiday and birthday money can be saved, along with income from part time jobs whilst in school, or vacation work. Students can let relatives know that they would prefer to receive cash to go towards their college fund rather than gifts.
Opening a high interest savings account is an option if there are any to be found which actually offer high interest rates. Another viable option is to open a high interest checking account as these often out perform rates on savings accounts. It pays to keep an eye on the interest rates offered and be prepared to move your savings around rather than take your eye off the ball and find the interest rate has dropped.
College is an expensive time with costs rising each year. Thinking ahead and saving towards college days is an astute move which will have long term benefits. It may even be a requirement of the college you attend that you add your own contribution.