Student loans are leaving college graduates drowning in debt. According to Student Loan Hero, Americans owe about $1.3 trillion in student loan debt.
When preparing for a child's future, many are told to invest a 529 savings plan. It offers tax breaks for the person contributing.
"Saving for college through the AZ 529 College Savings Program gives families the discretion to use their college savings for qualified higher education expenses at any Title IV accredited community college, vocational school, public or private four-year college or university throughout the United States, and some foreign institutions," Deena Lager, Director of Arizona Student Financial Aid and Director of the Arizona Family College Savings (529) Program, said.
Catherine Scrivano, a financial planner with Casco Financial Group, said it's exactly what she does.
"We've set up 529 plans in our families for all of the grandkids and they all know that's going to be their Christmas and birthday presents," she said.
But Scrivano said there are other smart, yet less thought of, ways to pay or at least defray the costs depending on the family's financial situation.
1. Buying real estate near the campus
"We've seen parents who purchase a home for their kids to live in, rather than pay for room and board," Scrivano said. "You might find you're able to share it and bring in some rental income from other students." This can be something you can keep long term, after the kids graduated and you can continue to bring in rental income.
2. Getting credits in high school
A high schooler doesn't have to wait until the fall after graduation to go to college. Many high schools have classes that offer college credits.
3. Starting early at a local community college
Students can enroll at a local community college the summer after graduation and knock out some general education requirements. It could shorten the time spent at the university and slash the total cost. Just be sure the credits will transfer.
4. Get on the fast track
If your child is really driven, they may be able to fast track their degree. "There are some programs that will let you get a four year degree in three years," Scrivano said. "You're saving a year's worth of tuition."
5. Pre-paid tuition
Arizona schools do not have this, but dozens of schools across other states offer the opportunity to lock in today's tuition rates for future students. "If a parent knows for sure that their child is planning on attending a specific private college, there is a529 Private College prepaid plan that about 200+ private colleges co-sponsor together," Lager said.
