Age-Appropriate Strategies

Age 19 to Age 22

You're in the bill-paying stage now, so all your college investments should be in conservative, short-term vehicles. Monitor your plan each year and try to anticipate needs over the funding period. Try to avoid last-minute panic actions.

  1. Make sure all your investments are in short-term, conservative vehicles like bank accounts. See the sections Developing a Funding Strategy and Investment Vehicles for more information.
  2. Consider making a gift of appreciated stock or other investments to your child. When your child sells the asset, depending on the "kiddie tax" rules that apply, he or she will pay tax at their tax rate, which could be lower than yours.
  3. If you are borrowing money, make sure you are also thinking about a plan for paying off the loan. Be clear with your child about his or her responsibility when it is time to pay off any student loans.
  4. Apply each year for financial aid, if it is appropriate, using the FAFSA (Free Application for Federal Student Aid). Circumstances change and your needs will change. Stay organized. Stay in touch with the financial aid office at your school. See the section Landing Financial Aid for information on this process. Also review the section Federal Loans and Grants for grant and loan comparison charts.
  5. Decide if there are other financial resources to help you pay college bills. See the sections Other Ways to Meet College Costs and Parental Loans for Learning to learn about other resources that may be available.
  6. Talk to your child about earning money and keeping expenses under control. Discuss working part-time, working during the summer, buying used books, selling books after the semester is over and budgeting his or her own money. You're going to need your child to understand and help to stay within your budget.
  7. Monitor tuition increases and other expenses.
  8. There are several tax provisions designed to help students and their families who are in the tuition bill-paying stage. See the section Education Tax Incentives to determine if you qualify.
  9. See the section "Putting It All Together" worksheet to help you determine where the money is going to come from to pay for each year of school.
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