Financial Preparation for College

 Preparing financially for college is as important as preparing academically. It’s never too late to start planning for future higher education expenses, but you’ll have more time on your side the sooner you start.

It’s important to understand the different types of financial aid that are available to help you pay for college. Whatever types of aid you plan to apply for, it is essential that you complete the Free Application for Federal Student Aid (FAFSA) to find out what you may be eligible for.

Grants: money given to those who qualify based on financial need, do not have to be paid back.

Scholarships: money given for education based on merit, need, and/or talent. No need for repayment. The State Board of Regents offers two merit-based scholarships, the Regents’ Scholarship & the New Century Scholarship.

Student Loans: money borrowed at a favorable rate, must be paid back with interest.

Work-Study: provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses.

529 College Savings Plans: are state-sponsored programs designed to help parents finance education expenses. Section 529 plans are subject to contribution requirements and investment guidelines. Withdrawals from the account are taxed at the child’s tax rate, and anyone can contribute to a Section 529 plan, regardless of their income level. In most cases, the money is invested in a portfolio of stocks, bonds, or mutual funds. The proceeds can be used only for education withdrawals for non-educational purposes trigger taxes and a 10% penalty. Utah’s 529 plan, the Utah Educational Savings Plan is one of the top-rated plans in the country.