Saving For College By Using Scholarship Funding

Written by K Fisher on December 31, 2021

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Saving for college can happen in a few different ways, either through a trust fund that happened to be set up by a student’s parents or a possible inheritance came someone’s way. Either way, there are alternative routes to securing a scholarship fund by utilizing the availability of scholarship winning to pay for tuition and college fees. Most of the time, student’s will apply to several scholarship contest (these tend to be just extra money that does not have to go towards paying for any school fees) because the award money can be divided up to help settle the impact of aburpt college fees.

Saving for college can look like one of the most terrible tasks that a student and a parent could do. However, with a few tips and tricks to ease into saving thousands, can really benefit the people involved. It’s no new realization that saving for college can be stressful and irritating. Yet, the amount of reward personally and in reality can affect a students determination to continue forward with their higher education.

The Truth About Scholarship Funding

Finanical aid will unfortunately need to be applied for, before applying and submitting scholarship applications. The implication here is that any scholarship application will ask for either a visional recipient or some kind of document that the student has signed up and is going to receive financial aid. Financial aid may need to be paid back to the government depending on the situation per family. This can be based on if the low income family suddenly raises their income and now can pay more out of pocket for tuition and any fees attached to a university.

Otherwise, a great route to follow would be applying for scholarships to help pay back any financial aid payments that may need to be paid back and fairly quickly.

College Saving Plans Available for Students and Families

  • 529 College Savings Plan – an investment account that offers tax benefits when used to pay for qualified education expenses for a designated beneficiary. This can use a 529 plan to pay for college, K-12 tuition, apprenticeship programs and student loan repayments. If using a 529 plan to save for college, your savings will have a minimal impact on financial aid eligibility.
  • Scholarships – Scholarships is one of the full proof ways to earn award money without needing to repay anything. Also there is no interest cut for any scholarship award, if a scholarship awards $40,000 to a winner then that is how much an individual will receive. In 2019-2020, college students received an average of $7,626 in scholarships and grants to cover about 25% of the total cost of college, according to the Sallie Mae study.
  • Grants – Governement or private sponsorship grants are available to anyone (primarily low-income families) . Grants are a no-pay back award to students who need extra financial help with paying for higher education learning.
  • Emergency Grants and Scholarships – These are typically last minute applications that can be utilized for up to $10,000 or more. These emergency grants and scholarships are for students who have faced a sudden income loss, or any financial loss that may harm or disrupt their schooling. In that case, there are several organizations available to help these students to contiune their university education, as well as, to stay on track.

How Much Should Student’s Save For College

Ah, the big question is here! How much should a student and their families save for college? Typically, for an associates degree which is a 2-year college term. From an Ivy League university

  • Yale – on average $59,950 in tuition then $77,750 which is the separate cost of attendence and extra fees
  • Harvard – on average $49,653 tuition then $76,479 which is the separate cost of attendence
  • Brown College – on average $59,254 tuition then $80,448 which is the separate cost of attendence
  • Dartmouth – on average $57,796 tuition then $79,525 which is the separate cost of attendence
  • Princeton – on average $53,890 tuition then $83,241which is the separate cost of attendence

The math shows that for a single year, well over $100,000 would be needed for one student to attend a single year at an Ivy League university. That’s why these universities tend to send out a few reserved spots for full tuition scholarships to cut out at least 50% or 80% of the total cost to attend.

Let’s look at some the global universities from around the world:

  • University College London – Annual tuition £9,250 – For international students outside of the UK attendence cost £28,619
  • University of Chicago – Annual tuition $57,642 – with an added fee of $1,656 for international students
  • University of Cambridge United Kingdom – Annual tuition £9,250 – For international students outside of the UK attendence cost would be £33,825
  • Swiss Federal Institute of Technology, Switzerland – Just fees per year would be $1660.00 but the cost of attendence greatly varies depending on the candidates chosen to attend here.
  • University of Oxford, United Kingdom – €10,430 for the annual tuition but the excess fees for international students to attend would be around $45,650 per year

Now let’s look at the best community colleges in the United States annual tuition and fees per year:

  • In Missouri – the average annual in-state community college tution is around $3,400 per year.
  • In California – the average annual in-state community college tution is around $1,300 per year.
  • In Flordia – the average annual in-state community college tution is around $2,600 per year.
  • In Texas – the average annual in-state community college tution is around $2,300 per year.
  • In New York – the average annual in-state community college tution is around $5,400 per year.
  • In Louisiana – the average annual in-state community college tution is around $4,200 per year.
  • In Washington – the average annual in-state community college tution is around $4,200 per year.
  • In Oregon – the average annual in-state community college tution is around $4,600 per year.
  • In Michigan – the average annual in-state community college tution is around $3,600 per year.
  • In Illinois – the average annual in-state community college tution is around $4,000 per year.
  • In Montana – the average annual in-state community college tution is around $3,700 per year.

The federal government requires that all U.S. colleges and universities publish their annual cost of attendance. The cost of attendenc includes tuition and fees, room and board, books and supplies, transportation, and personal expenses. If a student already has a long list of colleges in mind, knowing the true cost amount can give all students a generalized idea of how their costs compare.

But it’s important to note that a college’s official cost of attendance is like the suggested retail price of a product that’s frequently sold at a discount. This means some years there will be a marginalized dip in annual cost, while like the last 10 years the annual cost of tuition and attendance has tripled in price. The reality is that many students and parents can pay considerably less, as long as there is a comparative look at what colleges are within reach and which ones are out of bounds, cost wise.

What’s more useful to know is the college’s net price, after taking into account any grants and scholarships for which the student may be eligible. While student loans are also touted as “financial aid,” unlike grants and scholarships, they eventually have to be paid back with interest. Rather than reducing the total cost, student loans increase as the interests kicks in and then the student can be easily left with paying $200,000 for a 2-year college stint.

To Choose Ive League or Community College?

Now, it is a non-brainer decision that if Ivy League can not be afforded or even met half way with financial aid or scholarship funding then community college is the first way to go. The happy conclusion a lot fo students do not know is that if a student attends 2-years at a community college they can fairly easily transfer to finish their 4-year degree at an Ivy League institution. They call this the best of both worlds because a student can save by attending their first 2-years at a community college than they would be able to at an expensive Ivy League university.

Now, How to Save Scholarship Funding for College

The normal route for a student when they end up winning a scholarship award is that, the school they are enrolled with already has a college student bank account set up for them. This is where the scholarship funding will go to directly pay for any tuition that needs to be paid. However, what if a student has not picked the institution that they want to attend to as of yet?

Students can open college saving accounts with a brand name bank that will not only hold their scholarship award money but the longer a higher amount of money that sits in a savings account, that amount will grow. It’s part of the happy interest rate system that savings account are credited with.

Now, when applying for scholarships the national average states that if a single student applies to 20 scholarships, they will most likely receive 5 scholarship awards from that 20. This would offer a huge substantial benefited amount of award money to pay off either half or all of a that tuition fee for the first college year.

Apply, Apply, and Apply to A lot of Scholarships

Here is a students best route of account. A student needs to apply to as many scholarships as possible. But where does that scholarship money go? For private scholarships they will be sent directly to a student’s college account. They may also be sent to the student in the form of a check or direct deposit.

If there is any scholarship money that is left over and unused, then this is where the student needs to be cost savvy. The school or the foundation from where the scholarship was sent from may send a check for refunding the unused amount. Now if a student has more fees or equipment fees to pay off, that extra bit of cash should go towards those items. Afterward, any living expenses of any kind can highly benefit from this extra scholarship money.

Remember, scholarship money can be used to pay for any education expenses deemed necessary by the student’s school. This could include books, laptops, lab equipment, housing, and more.

However, there are conditions to keeping that scholarship money. If a student receives a scholarship that gives money on a semester basis, then there are very real conditions such as maintaining a certain GPA will most likely be applied. This means students should look out for or ending up with divided distributions. For instance,a student could have a $5,000 renewable, annual scholarship from the picked college, this means the student would actually receive only $2,500 toward tuition and fees applied to your account each semester.

All students should read the fine print when applying to scholarships. Because, scholarships can be split up into semesters or year durations. While there may be a $100,000 scholarship a student has won, it may means that the $100,000 is split into a 4-year gap. That means only $25,000 a year will be gifted to tuition and fees. This is how a lot of students can end up in financial trouble, by miscalculation what award money is coming in and exactly how much.

What about the 529 Savings Plan Mentioned Before?

Well, the 529 college savings plans do charge taxes for funds withdrawn for anything other than qualified education expenses for the beneficiary (the person chosen by the account holder to use the funds). The only known exception to this rule is if money is withdrawn in an amount equal to a scholarship received by the beneficiary. Since the penalty can be stiff, always double check the plan to make sure the exact withdrawing amount meets the the appropriate amount given.

Otherwise, students can easily end up in debt. Because after spending too much on other things outside of school, this can lead a student to apply for a student loan… which should be the last thing any student should do. A student loan is the last option if something is necessary.

Update Your Scholarship Information and College Costs Each Year

While, there are a ton of statistics for the 2019-2020 school year, that’s the past. That means students need to stay on top of new costs added for the year 2023 and 2024. Because this will be the most realistic and up-to-date calculated information needed for any steps to take towards paying attendance fees, rooming fees, and so on. No one wants to end up with a miscalculation of $50,000 suddenly added to their tuition payment.

Keeping a spreadsheet to calculate new cost additions is a great way to plan. Have family help out and research the latest cost information from the college’s on your radar. Otherwise, end up with a surprising cost amount that had not been calculated before. No one needs that kind of surprise.

Typical, standards show that college attendance fees are higher than tuition. Which is odd since tuition fees are the main top of conversation when college comes into view. Attendance fees hover around $50,000 and continue to jump at least 40% every year and a half. Imagine, how much could be missed out financially if the latest 2021 college year is not calculated into consideration.

Starting a Trust Fund is Never Too Late

That’s right. Parents don’t have to start a trust fund when their child is a toddler, they can start a trust fund when there child is a teenager. Any time is a great time to start a fund that a student can use later in life. The saying “a little goes a long way” is very true when it comes to creating a trust fund. Even with only $1,000 starting out, is a $1,000 to pay for textbooks and over added fees for college.

The end of the story is, be smart about the financial process. This has to be taken seriously since a heavy portion of funding is going into a higher education that will help direct an individual towards a higher paying salary career. It is commonly known that a 4-year degree will be way more costly than a 2-year degree. However, if the right route is laid out, utilizing community college for the first 2-years can save around $40,000 per year. Where junior and senior college students who have transferred to an ivy league institution, can actually transfer on scholarships that will pay for 60% of a students attendance year.

No matter the obstacles, there is always a way to work towards a common goal. Apply to several scholarships and place that funding towards the tuition of an already chosen university, or work out a strategy plan. Nevertheless, having a any kind of plan is better than no plan in this type of situation. It comes down to cost analysis, fee costs, and what fees can be waivered by which scholarships. Because that is another loop hole where certain university scholarships can be won to simply waive the attendance fee. That would be an annual saving of $50,000 for a simple wavied attendance fee.

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