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College Financial Planning for Parents & Students

TechGirl Financial loves working with parents and their students to determine wise ways to save for college, finance college expenses and repay loans.

In this section of our SMART Learning Library we cover many of the most commonly asked questions with regards to College Financial Planning. We provide some great TechGirl Tips, Tools and Resources to help both parents and students navigate through the sometimes complex decision making process.

Take a moment and click on the links below to get advice
from TechGirl Financial’s Founder Kim Gaxiola:

  • Download TechGirl’s “College Expense Parent Student Agreement”

Should Parents Use Their Retirement Funds to Pay for Their Child’s College Expenses?

Should parents use their own retirement funds, 401(k), Roth IRA, IRA or any other type of savings to fund their child’s education?

I believe that parents should not take any of their retirement funds out in order to fund their children’s college education expenses. Think about it, it will be a bigger burden on your children if they have to take care of you financially in old age because you have run out of money paying for their college education. Remember, your children as adults are going to have to cover their own expenses and their children’s expenses and their children’s college education cost and their own retirement. So if you are to spend your retirement funds on their college education expense, that’s one more expense which is going to stress them out when they’re in their middle age. Make sure that you have your retirement covered first; and if you have enough money or are on track with your retirement savings plan, then use the additional funds to help them with their college education expenses. If you are unsure whether or not you are on track for your retirement, seek the guidance of a financial planner. Here at TechGirl Financial we are happy to help you in this process.

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Should Parents Help With Their Child’s College Expenses?

Should parents help their children with college expenses or is it better to let them figure it out for themselves and learn early how to plan, save and manage their own finances, loans, etc.? What is the majority opinion on this, is there one?

There are many ways to pay for your children’s college education expenses. They are felt very strongly by parents and I have heard many different points of views. So that being said, there is no one right way to pay for your children’s college educational expenses, however there are some things that I feel like are really important to do with your children in order to make sure that everybody’s is on the same page.

So it’s a huge concern of mine that students when their seniors in high school are having to make one of the biggest financial decisions of their lives, yet haven’t had much of a financial education to understand what the repercussions are of any of the decisions are that they make. It’s really important that parents step up and teach their children a little bit more about finances and budgeting so that they understand what they’re getting into.

Parents, I believe you need to go ahead and set a budget and terms for how you are going to be able to help your children out. There’s no set amount that I can tell you, you should pay for your children’s college education; but what I will tell you is to be honest and up front, set boundaries and be disciplined at sticking to those boundaries. What I mean by this is to say, “I am willing to give you ten thousand dollars ($10,000) or whatever that amount is and I will give you this money for four (4) years for you to use towards your children’s college education expenses. By doing that children will understand how much their going to receive from you to pay for that education and how much is going to be on them to recover any differences that they have. This will also make your child have to value what that college education is; whether they want to go into debt to get that college education will be on them. Remember it’s very important first to set boundaries on your children, tell them how much they will expect from you and for how long they can expect those payments to go on.

Children need to educate themselves and as parents I think it’s our duty to help educate them on this; what I mean by that is explain to them what a budget looks like, what their budget will look like when their done with college and how much an average paycheck will be when they get out of college. You know if you’re going to come out making fifty thousand dollars ($50,000), how much will you really get every month to pay for all the things that you’ll need to pay for. Then figure out what those student loans are going to be and how much that’s going to cut into their paychecks as well. By doing this everybody will have a better understanding of how much the college education expenses are going to be.

If parent(s) decide to help their child with college tuition and/or expenses is it wise to create some type of contract between the parent(s) and child stipulating what they, the parents, are willing to contribute and what their child should be accountable for?

In my opinion, the hardest thing to do is to say no to your children. It’s especially hard when it comes to things that cost more money than you can afford. I have found throughout my kids’ lives, that if I give them a generous allowance per month, and tell them it is to pay for all the things they want but don’t need, they don’t ask me for much. I’ve set boundaries on what I will give, and they’ve learned to live within that budget and to save up for the costlier items they really want. You can do the same when it comes to college expenses. By creating a College Expense Worksheet and Agreement, you will be helping your child understand the expenses at hand; what is their responsibility and what’s yours; as well as a way to understand what a budget is. This is a great idea to teach your children accountability before they are on their own in the real world.

Download TechGirl’s “College Expense Parent Student Agreement”

What Are the Different Types/Categories of Financial Aid Available to Students?

Grants and Scholarships

(gift aid based on merit or need and does not require repayment)

There are a number of scholarships available. Some are as simple as one of your grandparents immigrated and came through Ellis Island, to the extreme of holding the top highest grades within your high school for all 4 years. Each scholarship requires essays, and some require multiple essays. Be prepared to write a lot. Once a scholarship is received, it is important to know that scholarships can be taken away if at least 12 credits are not kept as well as grades above each scholarship’s expectations.

Be sure to check out Scholly, an application to find appropriate scholarships for you. Scholly recently was featured on CNBC’s Shark Tank, and won money from venture capitalist sharks, Lori Greiner and Daymond John. By downloading the app and answering a few questions about yourself, you can get access to many available scholarships based on your personal demographics. It literally takes minutes to find the scholarships, but longer to apply for them. There are millions of dollars that go unclaimed in scholarship money because hardly anyone knows they exist. The app also shows you examples of winning essays which can be helpful for you to start the process.

Grants are given to those in need of financial aid. You must fill out financial aid forms to qualify for a grant. Grants are awarded by the greatest need. These do not require essays, but you must qualify for financial aid to be considered for a grant.


(student loans and student employment)

Helpful Resource Link:

Different types of Financial Aid Available

When should students start filling out paperwork for
FINANCIAL AID? Sophomore, Junior, Senior year?

It is best to start filling out financial aid forms early February. Some schools require the financial aid notification by May 1st. Students can start researching financial aid as a sophomore, it’s never too early to start preparing. However, in the junior year it’s time to really get serious about investigating financial aid options. Waiting until senior year may not give the student enough time to get their ducks in a row for some financial aid options but it shouldn’t be too late in most cases. Rule of thumb is to think about financing a college education as early as possible; having more time is better than not having enough. Click here for more information about the process of applying for financial aid.

What is the difference between a
Subsidized and Unsubsidized student loan?

Subsidized loans do not accrue interest, meaning the amount of the loan will not increase with a finance charge. Unsubsidized loans start accumulating interest from the day the loan was accepted and dispersed to pay the college tuition.

What are the different sources of financial aid?

  • a. Institutional (colleges and universities)
  • b. Private (corporations; community, religious, cultural and fraternal organizations; etc.)
  • c. State government
  • d. Federal government

Below are links to additional helpful information:

Student Aid Resources

Different types of Financial Aid Available

What can be covered by financial aid? Are dorms, Food, Parking passes, Books, School supplies allowable/covered?

When filling out the financial aid paperwork, make sure that if the student is staying in the dorms and will be dependent of the meal plan, that all of those expenses are notated on the application along with all school supplies such as writing utensils and if need be laptop and other technical purchases. If you are unsure about anything in the application, make sure you ask for assistance. The difference could be coverage for school supplies or nothing.

Specifically what expenses are NOT covered by financial aid that parents and/or students should be prepared for?

Financial aid only covers a specific amount, and that amount depends on one’s financial needs. Student loans are there to cover the rest, but it is always best to look into scholarships and grants to help offset the cost of interest with student loans. Student loans can cover housing, transportation, and technological finances. Even though it is nice to have a school loan and not pay into it until graduation, sometimes it is cheaper to purchase a car with a low interest than the average 9% with a student loan.

Making Loan Payments

If a student has a school loan under their name, are parents able to make loan payments directly to their child’s account to help them pay it off, should they choose, or do all payments have to be submitted directly by the student?

Anyone can sign in to pay for student loans. But some sites require specific information. requires you to know the following information:

  • federal student aid PIN that was assigned to the student
  • social security number
  • the first 2 character of their last name
  • date of birth

All other student loan agencies such as Wells Fargo Student Loans, SallieMae and other loan institutions have auto pay through a savings or checking account, and anyone can sign in and make payments on the loan if they have the required information such as:

  • password
  • account number
  • date of birth
  • social security number if required
  • and college name or names

When should students start filling out SCHOLARHSIP forms? Sophomore, Junior, Senior year?

Scholarship deadlines vary, it is best to research scholarship opportunities the summer prior to the senior year of high school. Some scholarships have deadlines as early as October. Since most scholarships require an essay, it is best to get a head start and dedicate time each week to focus on scholarship submission process.

Is there a limit on how many scholarships a student can apply for?

No, there is no limit to an amount of scholarships that someone can apply for. Students are encouraged to apply for as many as possible since there are so many people needing scholarship money.

When Should Parents Start Saving for Their Child’s College Expenses?

If parents are planning on helping their child with college expenses when should parents plan to start saving?

When should you start saving for your children’s college education expenses? The sooner you do it the better off you’re going to be. I have had parents that have started saving when they were pregnant with their first child, so defiantly the sooner you start saving the better off everyone will be.

Because of the power of compounding; which is a factor when you’re investing in the stock market, the sooner you also start saving the less you’ll have to put away and the more the earnings will take care of those college educational expenses.

What is on average the cost for a 4 year in-state and out-of-state college degree/education?

While none of us have a crystal ball and can predict what college or university our children will want to attend, we can have some influence on their decision – if we set boundaries on how much we are willing to spend on them per year. These charts can give you a reasonable understanding of what to expect in higher education costs that will allow you to create a number you think is reasonable to support your children given your financial situation. **I strongly encourage you to make sure your retirement funds are covered before paying for your children’s college education. Do not take from your retirement if you can’t afford to retire on what you’re saving currently. While you may plan on working longer to make up your retirement accounts, you may not have the luxury of doing so, if something happens to your health.

average cost for college 4 years

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