Help Guide Your Child to Success: A Parents’ Comprehensive Guide to College Planning, School Selection, and Student Loans

Keith Wayne, APMA®, CRPC®

Associate Financial Planning Analyst


Here’s a list of online resources, financial aid opportunities, and other hacks to help you find the best college for your budget.

Mother and daughter looking at papers.

Graduating from college is a major accomplishment that can take years of hard work, dedication, and sacrifice. Just finding the right school and paying tuition often present a wide array of challenges and uncertainties, especially for families with more than one student. Understanding what resources and information are available can help ease some of the stress associated with college planning. Here we look at tips for financing higher education and finding the right programs for aspiring college students.


Saving for college

In most situations, a 529 plan is one of the most efficient investment vehicles for college savings. 529 plans allow your after-tax dollars to grow tax-free until your child is ready for college. Then the funds can be taken out tax-free, as long as they are used for qualifying college expenses. Using a 529 plan is even more appealing than it used to be, thanks to new provisions in SECURE Act 2.0. If you don’t use the full amount you had set aside in a 529 plan for education, you can direct up to $35,000 in leftover funds toward your child’s retirement account.

If you’re considering opening a 529 account, it’s never too early to start saving for your child’s college expenses. In fact, you can open a 529 account in your name once you have a baby on the way. Once your newborn has a Social Security number, you can make them the beneficiary on the account. By starting early, you can take advantage of time in the market and compound interest. When your child is young, you can be more aggressive with your investments than you may be as the years pass. If you wait until your child is in elementary or middle school to begin saving, you might miss out on many years of potential growth in the account.


Finding the best-fit college

Finding the best college for your child begins with knowing them and the interests and activities to which they naturally gravitate as they mature. Paying attention to what energizes your child, what they’re good at, and their personality type can help bring focus to what kind of college will suit them best. If they love math and science, for example, a college with a focus on engineering may make sense. If your child is outgoing and thrives in crowd settings, a large university may be up their alley. If they value forging one-on-one connections with faculty or being part of a tight-knit campus community, they may feel more comfortable at a smaller liberal arts college. Keep in mind that, if your child selects a college that isn’t a good fit for them, they may choose to transfer to another school, which can prolong their time in college and drive up potential costs as well.

Kathy Connor, of Connor College Consulting, helps student athletes find colleges that are right for them, based on their academic, social, financial, and athletic profile. This holistic approach makes sense not just for student athletes but for all students.

Working through the college search process with your child provides a good opportunity to talk about who will pay for the many expenses (e.g., books, housing, meals, clothing, travel to and from campus, and recreational expenses, just to name a few). Start early. Also, who will pay for what is a topic that you may want to visit more than once during high school, just so things are clear. While there isn’t a one-size-fits-all percentage breakdown for who is responsible for various expenses, you won’t want to leave any ambiguity.

Online tools can help narrow down your college search. Collegedata, for example, offers a powerful college-search tool and a scholarship finder. An overview page lists graduation rates, which are helpful to know, since you’ll want your child to finish college in a timely manner. Comparing graduation rates can give you an idea of how quickly and successfully students move through specific programs, on average.

Collegedata also includes a link to the Net Price Calculator for the colleges listed on its site. The calculator estimates what it might cost to attend a school, as opposed to the advertised price. Admissions information is provided for each college on the Collegedata site, which will give you an idea where your child fits academically. If your child’s GPA and test scores are in the upper 25% of a school’s admitted students, it’s likely they can receive some merit aid. Even if your child is in the top 50%, it’s often worth applying for merit aid.1

Meanwhile, College Board’s website is the place for information on the SAT, ACT, and other standardized tests. It offers college-search tools and scholarship finders as well. You will also want to bookmark Common App, which is your one-stop shop for guiding you through the application process for more than 1,000 colleges.


Student loans

In December 2022, about 13% of Americans had some federal student loan debt, and 9.9 million borrowers had between $20,000 and $40,000 of student loan debt.2 There are four main types of student loans: direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.

  • Direct subsidized loans are made by the federal government and the Department of Education to those who qualify. Interest doesn’t begin until six months after graduation or when the recipient’s student status drops below half-time.
  • Direct unsubsidized loans are made to undergraduate, graduate, and professional students, and it’s not necessary to show financial need to qualify. Interest begins accumulating immediately on this type of loan. Students may choose to delay making payments while in school. However, the interest will continue accumulating and will be added to the principal owed.
  • Direct PLUS loans are made to parents of students, and, as with direct unsubsidized loans, it’s not necessary to show financial need. The important thing to remember with Direct PLUS loans is that you, the parent, are legally responsible for this type of loan. So, if you take out a Direct PLUS loan on behalf of your child, make sure you’re ready to make the payments or talk with your child ahead of time about their share of responsibility for repaying the loan.
  • Direct consolidation loans allow borrowers to consolidate their loans into one single student loan to make things simpler.

While debt-consolidation loans may seem appealing on the surface, they have a couple of important downsides. First, consolidating debt into one loan eliminates the option of either the “debt snowball” or the “debt avalanche” methods of paying back loans. With the debt snowball, you pay off your smallest loan first and then your next smallest, and so on, until all loans are paid off. Debt avalanche involves paying off the highest-interest-rate loan first, followed by the next-highest interest rate, and so on. Both methods can give borrowers the boost of feeling they’re making progress, because they are! If you consolidate all your loans into one, you may lose the opportunity to pursue either of these psychologically motivating loan-payoff strategies. The second disadvantage is that the borrower’s loan rates are averaged and then rounded up to the nearest eighth of a percent, so you end up paying slightly more interest by consolidating your loans.

There are a couple of options for paying off student loans. One method is to devote as much of your extra cash flow as possible toward paying off your loan, as soon as possible. This can be a good strategy because you pay less interest if you pay off your loan early. Other options include repayment plans, of which there are two main types: traditional repayment plans and income-driven repayment plans. Within the two main types of repayment plans, there are several variations.3 A great tool to help you decide which repayment plan is best for your situation is the Federal Student Aid Loan Simulator. The Loan Simulator is useful whether you are just beginning to pay off your loans or are considering changing to a different repayment plan.  This tool can also simulate the impact of taking additional student loans.

Among traditional repayment plans, you can choose a 10-year repayment plan if your goal is to pay off your loan as fast as possible and pay the least amount of interest. If you choose this option, your payments will be higher, thanks to the compressed payment schedule. One popular option is the Public Service Loan Forgiveness Program, but you won’t want to choose the 10-year repayment plan and loan forgiveness. That’s because, if you qualify for loan forgiveness, your loans are forgiven after 120 payments, and you will have already paid off your loan at the end of the 10 years under a 10-year payment plan.

Graduated payment plans are 10-year plans that offer lower payments at first, which then increase every two years. This type of plan is helpful for those who expect to make less money at the beginning of the 10-year period and more at the end (a group that includes most college graduates).

If you have more than $30,000 in student loans, you can qualify for an extended repayment period of up to 25 years. This route offers lower monthly payments than a 10-year plan. However, if you qualify for loan forgiveness at the end of the plan, you’ll pay income taxes on the forgiven amount.

If you’re seeking to have your loan forgiven or have the lowest monthly payments possible, an option is to look at one of the income-driven repayment (IDR) plans. Payments on income-driven repayment plans can be as low as zero dollars a month. These plans include variations, including Revised Pay As You Earn (REPAYE), Income-Based Repayment, Income-Contingent Repayment, and Income-Sensitive Repayment. Note that as of this writing, the REPAYE plan has been replaced by the Saving on a Valuable Education (SAVE) Plan. The SAVE plan provides the lowest monthly payments of any IDR plan and will take effect this summer. The U.S. Department of Education website gives eligibility requirements for various repayment plans.4


Appealing your financial aid package

More often than you might think, you can negotiate a college’s financial aid offer. Even if your child is accepted at the school of their choice, it can be worthwhile to do additional research and even apply to another, similar school. If accepted and offered aid elsewhere, they can tell the preferred school what aid the other, similar school is willing to give and ask if the preferred school can match the other school’s offer.

Do your homework and don’t be afraid to ask. Another element to consider is that colleges are sometimes interested in how and why the competing college structured their financial aid package the way they did. For example, if a competing college is willing to offer more for work study, that may be something that the preferred school can do as well.

Another consideration is whether and how your family’s financial situation may have changed. If a college sends an acceptance letter, that college wants the accepted student to attend. Colleges prefer that families pay what they are able to. The amount that a student can pay is not a random number; it’s known as their Student Aid Index (SAI), which is calculated when you or your child fills out the FAFSA form. (The SAI was formerly known as the Expected Family Contribution [EFC].)

If some of the numbers your family entered on the FAFSA form have changed significantly, colleges may be able to work with you to make sure your child receives as much aid as they qualify for. Colleges are also businesses, and students are their customers; therefore, colleges have an incentive to enroll and retain your child as a student. If you’re trying to show that your family’s financial situation has changed, be ready to back up your claim with documentation (e.g., pay stubs or medical bills). As with many things in life, it doesn’t hurt to ask.

When it comes to merit-based aid decisions, there are some things your child can do to appeal. One strategy has to do with their GPA. If your child finds out that a slightly higher GPA would have resulted in getting significantly more aid and they took an academically rigorous course load in high school, but the college that they are going to does not take weighted grade averages into account, consider writing a letter of appeal requesting more merit aid.5 Check out the College Board or Collegedata websites to see how academically rigorous a college is.

May 1 is typically the enrollment deadline for most colleges. While this is an important date to keep in mind, some colleges have different dates. The month of April is also a good time to visit colleges, armed with your information and ready to negotiate a better price. When your child does write a letter or stop by their college of choice to negotiate, keep in mind that they are writing to or talking with real people, and soft skills matter as they do everywhere else in life, so be polite and respectful. It’s also recommended that you don’t use the word “negotiate,” but rather make your appeal using a positive and confident approach.

Early Spring is a good time of year to see if you qualify for additional scholarships based on elements that may have changed since the initial application. Maybe your child is finishing strong academically and their GPA is now higher. Maybe they have improved SAT or ACT scores. Beyond grades and test scores, you may also want to highlight any of your child’s noteworthy hobbies or achievements outside the classroom. Colleges want a diverse student population, and if your child has something unique to add to the college’s student body, that may help. Reach out to the admissions office at the school your child will be attending to check on additional merit aid at this point. It may also be worthwhile to check with your child’s high school guidance office to see if they can offer additional help.


Paying less for college

Need other creative ideas for helping to pay for college? Students who work in the cafeteria sometimes get discounts on meals. Serving as a resident assistant can come with a substantial scholarship and help develop leadership skills. The American Opportunity Tax Credit offers a discount of up to $2,500 per student, per year, for the first four years of higher education.6 The lifetime learning credit can be used for undergraduate, graduate, or professional programs and can be used for up to $2,000 per tax return. If your child is working their way through college, there is also a growing list of fast-food restaurants and other companies that offer tuition assistance for employees. Starbucks and Chipotle have some of the best tuition assistance for college students, but there are several other companies worth checking out, too.7 If your child is considering working their way through college, they should do some research before applying for jobs to see if tuition assistance is part of compensation.

Some colleges offer tuition freezes, where the tuition is guaranteed to stay the same for four years’ enrollment. If you’re comparing two schools, the one with the tuition freeze may suddenly look more affordable.

Attending local community college might be another money-saving option for your child. Some states allow students to earn a full associate degree, while still in high school, that can be transferred to a four-year college. Another option is to graduate from high school; enroll for a year or two at a community college, at a lower tuition rate; and then finish the degree at a four-year school. Some universities offer dual enrollment, allowing students to take classes at the local community college that count toward degree fulfillment at the university. This can be a powerful money-saving option, since for some classes there may be little difference, other than price, whether taken at a community college or at a university. Be sure to confirm that the university accepts credits from the community college.

Every student is different, and, for some, community college is where they can best thrive. My oldest son graduated from high school and then took a gap year before beginning college. My daughter went to a four-year college directly from high school, while my third-born started at the local community college before realizing that he was a lot more interested in pursuing a hands-on career rather than sitting in college for four years. He is currently enrolled in a certificate program in welding. Not every well-paying or fulfilling job requires a four-year degree. It’s important to know your child and how they are wired, to help guide them in their best career path.

Internships are another option to help pay for college and give the student valuable experience in their chosen field. In fact, in 2023, the average pay for a summer internship was over $18 an hour.8 A bonus of landing a solid internship is that many internships turn into fulfilling careers after college or at least help provide networking that can lead to a sought-after entry-level job.

Scholarships can sometimes help reduce the cost of college. Some are offered at the departmental level within academic programs, and your child may need to be accepted as a student to qualify. Some scholarships are reserved for juniors and seniors but are worth looking into because of the potential savings.

Another tip to remember, when comparing schools: Be sure to compare apples to apples. In other words, make sure that the price colleges quote for dorms or meal plans is for the same level of service. One university may offer a higher-level meal plan or dorm package than another. Sometimes, when the price being quoted for room and board is very different, it may be because one university is quoting the high-end package, while the other university is quoting the budget package. While looking at the complete package a college offers, look over the details to see if some items can be declined to save money. For example, student health insurance may be automatically included in the cost of attending a college (unnecessarily, if a student may still be covered under a parent’s health plan).


In-state or out-of-state

A common misperception is that in-state tuition is always cheaper than out-of-state. That’s not always the case. State and regional college tuition discount programs exist where universities from neighboring states charge either in-state or discounted out-of-state tuition to students from neighboring states. Like many programs, restrictions may apply, so check your regional exchange program. Exchanges include the Midwest Student Exchange, the New England Regional Student Program, the Academic Common Market (for Southern states), the Western Undergraduate Exchange, and the Western Regional Graduate Program.9

The fact that colleges are businesses with marketing departments can sometimes be leveraged to save money as well. Colleges’ market materials often tout how many different states are represented in their student population. For example, it’s more impressive for a college to say it enrolls students from all 50 states than, for example, from 35 states. So, if your child is applying to a midsize or small college in a faraway state, they could have an advantage in seeking extra scholarship money, if they are the only student (or one of few) representing their state.

Like any major life decision, finding the right college with the most affordable value can take time and effort. Proactive planning and research can help find the best value for the tuition paid and ensure that the student finds the school that suits their goals and interests.

1 How to Pay for College, by Ann Garcia, CFP®. Harriman House, 2022, p. 179.
2 “Federal Student Loan Portfolio,” U.S. Department of Education Office of Federal Student Aid.
3 “Your Guide to Federal Student Loan Repayment Plans,” by Brianna McGurran. Forbes Advisor, April 11, 2022.
4 See
5 Garcia, Ann. How to Pay for College, 2022. Pg. 218
6 “Credits and Deductions for Individuals.” Internal Revenue Service.
7 “Fast Food Jobs That Help Pay for College,” by Kathryn Knight Randolph. Fastweb, June 15, 2022.
8 “Summer intern salary in United States.”, June 9, 2023.
9 “State & Regional College Tuition Discounts.” National Association of Student Financial Aid Administrators (NASFAA).

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