A parents’ guide to paying for college

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Since the 1990s, the costs of both private and public college tuition have easily outpaced inflation. This means helping to pay for your children’s higher education may no longer be as straightforward as opening a 529 account, snagging as many scholarships as possible and filling out FAFSA forms.

Take another look at loans.
Student loans have become an increasingly common option as even the most disciplined savers and investors have found the actual costs of college to be overwhelming. At a minimum, loans can help to supplement an existing college funding plan.

If this is the route you’re considering, make sure to examine the pros and cons of each kind of loan. Also, make sure future payments will work with your existing cash flow and align with other financial priorities, like saving for retirement.

To co-sign or not to co-sign?
Consider very carefully whether you’re willing to put your future credit score and financial standing at risk by co-signing for a student loan. If your child is unable to complete their payments after they graduate, you may still bear the ultimate responsibility of paying off the loan.

Claim all available tax credits.
No matter how you end up managing the task of paying for college, make sure you claim every applicable education-related tax credit. Conditions can change from one year to the next, of course, so be sure to double-check the details of the current federal tax laws and watch for any future policy shifts.

• Tweet