4 Great Ways to Pay for Your Child's College Education

One of the best things you can do for your child in life is to help them get a top-notch college education. With a university degree, the quality and quantity of job opportunities increases exponentially. In addition, there is a huge difference in pay between jobs requiring a degree and other positions that are available. Over the course of a lifetime it's estimated that an individual with a college education will earn over one million dollars more than someone without a degree.

With the high cost of education, coming up with the money for a university program can put a real strain on your personal finances. College tuition and expenses for room and board have risen year after year, far in excess of the rate of inflation. In order to meet the steep costs of an undergraduate degree program, it's important to look at all available options and to be creative too.

Finance Costs with Private Student Loans

As part of the application process, you and your child will fill out the Free Application for Federal Student Aid, or FAFSA. These forms give the school the financial information they need so they can decide what scholarships, grants and work study monies they will offer your child. Typically, the financial aid offer from the university will not cover all annual expenses. In order to afford the full expense of the undergraduate degree program, one of the best options is to apply for and take out private student loans. These loans, which are offered by banks, credit unions and finance companies, allow your child to get the education they need now and pay their college costs off over time.

Refinance Your Mortgage

One of the best ways to free up money to pay for your child's university program is to refinance your mortgage. With current rates at near historical lows, you may find that refinancing could free up thousands of dollars per year. If you existing mortgage has an interest rate that is several percentage points higher than current rates, now would be the perfect time to rethink your situation. It helps to look for offers that bundle closing costs in with the new loan so there are no out of pocket expenses.

Take Out a Home Equity Loan

Another option to explore is taking out a home equity loan. While a refinance is designed to lower your monthly payment, this type of finance is designed to let you tap into the increased market value of your home. If your house has appreciated in price over the years, you can draw on that equity and turn it into cash. With low loan rates you may be able to borrow a higher amount on your home, keep your monthly payment close to the same and walk away with cash in your pocket. You can then use those funds to pay for tuition and other expenses.

Look for Specialized and Local Scholarships

One of the ways you can reduce your out of pocket school costs is by actively looking for additional scholarships. Specialized grants and scholarships are often offered by different companies and organizations. For example, a national engineering association may offer monetary awards to bright students who wish to pursue a career in engineering. Many employers also offer scholarships to children of their employees. In addition, civic organizations such as the Kiwanis or Rotary clubs may offer awards to deserving or promising local students. Some states even have specialized scholarships, so you should check that source too.