Financial aid director advises families not to shy away from college payment notifications

COLUMBIA, Mo. (KMIZ)

Sending a child to college comes with added financial pressure for most families and a couple of experts have advice for families and students beginning the payment process.

Colleen Brown, senior director of financial aid at Columbia College, said students and families can expect to start receiving billing statements and award letters from their institutions once classes start.

She said people need to make sure they are looking for emails and other notifications surrounding their students' college payments.

"It's really easy when you're thinking about [finances] to get so stressed and kind of tune it out," Brown said. "Don't ignore those notifications."

Brown said most colleges offer the option of paying over the course of a semester or paying in full at the start of a semester.

Wallstreet Group Financial Advisor Travis Ford said any source of money is acceptable to pay toward education except for retirement accounts, which will have taxes and withdrawal penalties. Using that money early also takes away from a family's retirement finances.

"Things do get real when the kid goes to college and they're honestly some of the most expensive times in a family's life," Ford said.

He said families should decide if they'll pay bills monthly or have a dedicated account to fund those bills. He encourages families to make a new budget when their child goes to college to account for new expenses.

"Especially for empty-nesters, they may be tempted to do some home improvements or take some vacations they didn't have time to do before," Ford said. "You definitely want to think ahead on those things because this can be a doubly expensive time in life if you take on all that at once, so just make sure you can afford to do so."

Many people might choose to pay for school with a student loan through the federal government. Brown said since loan repayments don't start until the student is out of college, one way to get ahead is what she calls a keep-in-touch payment.

"Getting yourself in that mode of $5 a month or something -- just so that you know it's there, you're keeping your contact information up to date -- can be a really responsible way to have loans but be making an impact on it before you graduate," Brown said.

She said one way to help lower the cost of college includes filling out the Free Application for Federal Student Aid, which opens in December this year. People should also consider student employment, ask if their current employer offers tuition assistance and apply for scholarships.

"There are a lot of scholarship opportunities out there for students who are in their sophomore, junior or senior year, even graduate students," Brown said. "It's worth the time to write an essay and fill out the paperwork."

Ford said no matter how much the parent or student is responsible for paying toward tuition, the student should be involved in financial planning.

Ideally, he said saving for a child's college education should happen when the child is born. Parents can set up a 529 college savings account with good tax advantages but is restricted to education. They can also open a separate investment account for more flexibility.

Ford said if parents start putting away $100 a month toward their child's education, that would turn into about $46,000 over 18 years.

He said families need to figure out early on how much they are willing to contribute to a child's education and how much the child will be responsible for paying. There is no right or wrong answer to this -- he said it all depends on what works best for a family.