5 Ways to Help Your Children Pay for College by Themselves

Smart ways to fund their higher education when you don't have a ton of money

Chris Taylor,

AARP

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En español

Published April 10, 2020

Happy mature man poses with his adult daughter after her college graduation. The graduate's husband and children are also in the photo.

E+ / Getty Images

Here's a scary scenario that may seem familiar: Your kids are off to college in September, but, thanks to the mortgage, the monthly bills and the looming threat of being laid off because of the coronavirus, you haven't been able to put any money aside. But you don't want your children to become more participants in the nation's $1.6 trillion in student loan debt. So what can you do at this point?

Take a breath, because you have options, even if you're not in a financial position to just whip out your checkbook. There are multiple strategies you can invoke to help mitigate costs, share the load and launch your kids or grandkids into the workforce without a crushing financial burden.

"It's hard, but millions of parents have done it,” says Kim Clark, assistant director of the Washington, D.C.–based Education Writers Association. “There are a lot of different little things you can do to reduce your costs."

So what are those strategies? Here are a few tips from the experts.

1. Fill out the FAFSA

This seems like a basic point, but around a quarter of families don't even complete the Free Application for Federal Student Aid — because they think they won't qualify, because it's too complicated or because they miss deadlines.

That's a mistake, and a big one, because then you don't have access to most of the scholarships and grants that could help lower your burden. In fact, 31 percent of college costs were covered by scholarships and grants in the past school year, according to the Sallie Mae report “How America Pays for College 2019.” To take advantage of this aid, however, you have to complete the FAFSA. “Parents generally underestimate their eligibility for needs-based financial aid,” says Mark Kantrowitz, publisher and vice president of research at SavingforCollege.com.

2. Look into private scholarships

At your company there may be programs in place to assist employees’ kids with their school costs. If you work for Google or Bank of America, for instance, it might offer special scholarships or tuition help.

To find funding sources, check out scholarship aggregators, in which you input your information and get matched with relevant opportunities. Two of the most prominent, Kantrowitz says, are FastWeb.com, with its database of 1.5 million scholarships; and the College Board. Just make sure such sites aren't asking for money upfront, which usually indicates a scam.

3. Become a research ninja

Let's face it, most high schoolers are not great at sitting down and doing the legwork necessary to figure out the best and cheapest college options. That's where you can help, by being their research wingman and steering applications to the right institutions.

Generally speaking, the cheapest four-year option is your in-state public institution, with average annual published tuition and fees of $9,410, according to the College Board. Public two-year community colleges are even less, at $3,440 annually, but will require a transfer to get that bachelor's degree.

Keep in mind, though, that many Ivy League universities now waive tuition entirely for families below a certain income level. Don't pass up the possibility of a full ride at one of the world's great institutions just because you didn't know about its income policies or have the paperwork done in time.

4. Cover room and board

Whether you want your college kid living at home is a decision you'll have to make. But a big portion of college costs doesn't involve tuition, fees or textbooks but room and board, which runs $11,140 a year at public institutions, according to the College Board.

If your child can stay home with you for her college years (even for just a couple of them), that will save tens of thousands of dollars. “Anything parents can do to reduce the cost of living is a huge benefit,” says Clark. “You do lose something from the college experience by not living in a dorm, but you do gain a lot of money. If that makes the difference between being able to attend college or not, then you should do it."

In a similar way, keeping college kids on family plans (car insurance, health coverage, cellphone) can save them a ton of money, compared with the rates they would be able to secure on their own. “There are a lot of bulk-purchasing advantages that parents can extend,” Clark notes.

5. Avoid big mistakes

Securing a financial future — yours and that of your kids — involves not just choosing smart paths but avoiding bad ones. So, for instance, try not to cosign for private student loans, which will keep you on the hook in perpetuity if the student isn't able to pay them back. Don't raid your retirement funds, which will put your own security in jeopardy. What's more, try not to take out loans against your home equity, another temptation that could put your family home at risk.

The key: Don't resign yourself or your college kid to a lifetime of crushing student debt. With thoughtful college choice, creative planning and necessary compromises, you should be equal to the challenge. “There are a million ways to save money,” Clark says. “So find your community and get inspiration and ideas from other parents. Getting support from other people who have done this is a real positive."

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Chris Taylor is a senior correspondent with Reuters, covering personal finance and workplace issues. He is a frequent contributor to Fortune, and has won journalism awards from the National Press Club, the Deadline Club and the National Association of Real Estate Editors.