A few weeks ago I attended a virtual college event at CollegeWeekLive. I was impressed with the simplicity of the information and wanted to pass it along to all my readers who might not have had the opportunity to attend. This particular session was conducted by Kim Clark, staff writer for U.S. News and World Reports. She outlined some simple steps to raise $15,000 for college:

1. Up to $2500 from Uncle Sam–via tax credits (Hope and Lifetime Learning Credit)
2. Child labor–put your teen to work at a summer job ($8 an hour x 40 hours a week for 9 weeks=$2880)
3. Student loans–Stafford Loan ($5500 max per year at 7%); after student leaves college can sign up for payments based on their income (less than 15%)
4. Family savings–cut teen to occassional driver and save $; food bills will decline; stop subsidizing entertainment (food and insurance can =$300-$400 a month)
5. Scholarships and grants–leverage grades, test scores, athletics, arts for merit-based grants; apply for local scholarships
6. Friends and relatives–ask for college fund contributions instead of presents
7. Corporate sponsorship–some employers subsidize education for employees and families; UPromise
8. Reduce college expenses–reduce dorm costs (share with other students); watch meal plans; buy used textbooks or rent; earn cheaper credits at community college, AP classes or dual credit classes; sell student’s car (won’t need one at college)

The bottom line: $15,000 or MORE! Here’s how it all adds up:

1. Tax break-$2500 per year
2. Student loan-$5500 per year
3. Student job-$3000 per year
4. Parent savings-$4000 per year
5. Relatives-_____ (fill in blank)
6. Scholarships-____(fill in blank)
7. Corporate sponsorship-____(fill in blank)
8. Reduction in college expenses-_____(fill in blank)

By piecing together all these separate components, there is no limit on how much you can raise for college costs. At the very least you can raise $15,000, at the very most, the sky is the limit!

You can check out U.S. News and World Reports education section: Paying For College for more information and tips.

So many parents ask me the best way to save for college. Since every family is different, and their financial situation is unique it’s difficult to give a generic answer. But one thing is certain: saving will reduce your financial burden when your teen enters college. And as a responsible parent, you should plan for this expense, just like you plan for retirement.

Many experts agree these are the two best ways to save:

An Education Savings Account or Education IRA–This allows you to save $2,000 (after tax) per year, per child. Plus, this grows tax free! If you start when your child is born and save $2,000 a year for 18 years, you would only invest $36,000. However, at 12% growth, your child could have $126,000 for college!

A 529 College Savings Plan–Look for a 529 plan that allows YOU to control what funds are in the account. Do not choose a 529 plan that freezes your options or automatically changes your investments based on the age of your child.

Both of these options offer tax savings.

If you want to see how much you should begin saving, use this easy College Costs Calculator. But, be prepared for college sticker shock. Looking at it on paper can be quite sobering.

Here are two great sites that will help educate you and your family about saving for college.

SavingforCollege.com

Finaid.org

Spend some time reading all the information because all the answers can be found on these two sites. Once you know the facts about college savings you will be able to make an informed decision.

It’s never too late to start saving. And remember…Preparation Prevents Panic!