The Parent’s Guide to Paying for College

Whether your child is about to graduate high school or is still in elementary school, the thought of sending them to – and especially paying for – college can be stressful for any parent. If you find yourself struggling to put together a plan for paying for your child’s college education, whether you are a new parent or the parent of a teenager, it can be helpful to have a place to start. Concordia University, Nebraska is dedicated to assisting you in figuring out that plan. College is a large investment, and if you are one of the 36% of parents who are not saving for their child’s college education, here is a guide for you to get started.  

From the time your child is born, you can begin to put away money marked specifically for their eventual higher education. 529 plans are a great place to start – Tabitha Haynes, Concordia’s financial aid specialist, says that “529 plans have tax advantages, and each state has a sponsored plan, which may offer even more benefits.” She directs parents to the Forbes Advisor, which can provide them with information on 529 accounts specific to their state of residence. According to the Education Data Initiative, 30% of college savings plans are 529 plans – the largest majority.  

“Think of the 529 plan as a piggy bank,” says Haynes. “You can add money to it whenever it is convenient. The main thing is that the funds will grow over time, so one dollar can turn into much more.” She emphasizes that, even if parents cannot contribute thousands of dollars to their child’s 529 account, even placing a small amount of money in it annually can help it grow over time. Savings from 529 accounts can be used at any U.S. college or university, as well as some international universities, up to $10,000 per year.  

What can often help parents the most is, according to Haynes, a financial advisor that can guide them through the process of saving for and paying for their child’s education in part or in full. “They [the financial advisor] will map out a plan for how much to save over time,” Haynes states. Financial advisors can assist parents in deciding how much they can reasonably put away for their child’s college education over time. “Really,” said Haynes, “parents are investing in a child’s education, much like they would a retirement account. Every little bit helps, because as we know, education can come with a hefty price tag.”  

Other types of savings accounts can also be used to pay for education-specific expenses. One such account is a Coverdell Education Savings Account (ESA), in which parents can invest up to $2000 annually. Like a 529 account, funds in Coverdell accounts can be used toward college tuition costs; however, students can also use them for other school expenses, and parents can even choose to allot them for elementary or secondary school costs. Both types of account earn interest, meaning that funds placed in the account will grow over time, no matter their starting value.  

However, if you find yourself unable to save money throughout your student’s childhood, many other options are available, both at the federal level and at Concordia, to pay for a college education – in other words, a quality Christian education is not out of the question! Concordia’s financial aid offerings, as well as various merit-based, faith-based, participation-based scholarships and even the new work-study Paul Scholars program (launching in the Fall 2024 semester) can all significantly decrease the price families and students pay for a high-quality education.  

At the federal level, both the Free Application for Federal Student Aid (FAFSA) and student loan options, including Federal Direct and PLUS loans are available. Concordia supports both financial aid forms in conjunction with its institutional aid offerings. In addition, students may apply for outside scholarships through many different sources, such as area churches, employers, LCMS districts, or online databases.  

College should not be out of the question for any hopeful student – even if the student is looking at a private Lutheran education at Concordia University, Nebraska! No matter the amount that you as a parent can contribute financially to your child’s education, your student will benefit greatly when you support them throughout their college preparation journey.  

Want more information about Concordia’s financial services? Learn more here.