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September: National College Savings Month

Saving enough money to send your kids to college can be stressful and overwhelming, especially when the cost of a college education continues to rise. In a recent survey of college pricing, the College Board reports that a “moderate” college budget for an in-state public college in the 2012-2013 academic year averaged $22,261, while a budget for a private college averaged $43,289!
Those numbers may sound scary but knowing what’s ahead is the best way to prepare your family and your finances for the cost of a bachelor’s degree. The earlier you start saving for your children’s education, the better. And since September is National College Savings Month, we have some for you!
  • Always apply for financial aid.
No matter what your family’s financial situation is, – apply, apply, apply. Sixty percent of undergraduate students receive some type of financial aid that covers 20 to 40 percent of their total college cost. Even if you’ve spoken with other parents whose kids didn’t qualify, you should still apply for financial aid. Each and every year you should fill out the Free Application for Federal Student Aid (FAFSA). The application and more information can be found at
  • Know how financial aid works.
Institutions analyze a number of factors when deciding whether a child should receive financial aid, including the student’s “expected family contribution,” or EFC. This is essentially the amount the family is expected to pay based on your particular financial circumstances. The other two factors are outside resources, such as scholarships, and the cost of the school your child is planning to attend.
For more detailed information on these factors and the formula, visit
  • Open a 529 college savings account. 
529 accounts function much like a retirement account, but for college savings. Earnings accrue tax-free and tax-free withdrawals can be made for qualified education expenses. Make sure you read our blog post from last month, which explains 529 plans in more detail.
  • Look into education-related tax credits.
Take advantage of any tax credits you may qualify for that are education-related. These include Hope Scholarship credits and other deductions for tuition, fees and student-loan interest. While you may not see the savings immediately when paying off your bill, you will feel them later when you file your taxes.  Go to for more information.
  • Increase your savings each year.
If you are able to start adding to the college fund early, make sure you increase the amount you save each year. As you know, college tuition and other costs increase each school year, so your savings should too. Even if you can increase the amount you set aside by just a small percentage, it’s worth it.
Whether you’re preparing to send off your first child, or your fifth, our representatives are always available to discuss college savings with you and help you design a solid plan to prepare financially. Do you have any good tips? We’d love to hear them!