The average tuition and fees at private four-year colleges and universities increased by 11 percent (in 2015) over the five years from 2010-11 to 2015-16, according to the College Board.
With this figure in mind, John Rasmussen, head of Wells Fargo`s Personal Lending Group, and other analysts are offering tips to help families make a financial plan for college:
Get a ballpark figure - College costs can vary widely, depending on the institution. Will your student be attending a private or public college? Will you be paying in-state tuition? Will you be factoring in housing costs or commuting costs?
“Having answers to these questions can help you avoid sticker shock down the line,” says Rasmussen.
Check out a specific institution’s published college costs for an accurate number that takes into consideration different factors. Many schools offer a cost calculator on their site to help you do the math.
Outside funding - Explore every avenue for supplementing college costs. All families should start by completing the FAFSA, which is a free application for federal student aid, to determine your eligibility.
Next, investigate merit-based scholarships. From small grants to full rides, a scholarship of any size can reduce costs without the stress of payments or interest. A database of scholarships can be found online at tuitionfundingsources.com.
Private student loans can expand possibilities for many families, fully funding most college expenses. To learn more about how private student loans work, visit wellsfargo.com/student.
Look ahead - Four years goes by more quickly than you think. Have a loan repayment plan in place.
While many responsible lenders defer repayment on loans until after school is over, and some even allow graduates to postpone payments for a number of reasons, being prepared is essential. Students should spend time before graduation on a job search to help ensure they have income when loan payments start becoming due.
While students are in school, they should consider part-time work in order to earmark earnings for loan repayment. Also, being mindful of spending and maintaining great credit will help students avoid significant credit card debt on top of student loan debt.
Get savvy - There are plenty of free resources available to prospective students and their families. For information on scholarships, student loans, federal and state aid, building credit, as well as money management tips and tools, visit Wells Fargo’s “Get College Ready” website at wellsfargo.com/getcollegeready.
College-bound families should make financial plans as soon as possible. From identifying and securing funding to amassing adequate savings, the sooner you get the discussion started, the better.