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Here's how I'm making sure my son can get a degree - without loans

The search for financial aid should ideally begin

The search for financial aid should ideally begin well before the high school years, when some only begin seeking out scholarships. Credit: Getty Images/iStockphoto

I graduated from college in 2006 with $89,000 in student-loan debt. With no family help, I relied on a blend of federal and private loans to earn my journalism degree. Like many of my peers, I signed on the dotted line without fully understanding the terms. The debt that followed consumed my thoughts and, for a long time, nearly half my income. I knew I wanted to have a family someday but wasn’t sure I would ever be able to afford children.

When I think of my toddler son one day running the same gauntlet, I’m filled with familiar dread. I won’t let him travel down the same path.

My husband and I aren’t willing to forgo retirement savings along the way. So in addition to funding his 529 plan, here are a few ways I’m saving for my son’s education:

  • Starting early with grants and scholarships. The search for grants and scholarships should start long before the high school years, according to Mark Kantrowitz, a leading expert in college financing and author of “Secrets to Winning a Scholarship.” “There are even scholarships available to children in grades K-8, such as awards for community service, art and essay competitions, geography and spelling bees, contests for the best peanut butter and jelly sandwich, math competitions and prizes for the best mibster (a marbles champion).” In addition to Kantrowitz’s book,, and list opportunities for kids younger than 21, and it’s never too early to start looking.
  • Researching “no loan” universities, which have replaced financial aid packages with grant and work-study programs. No-loan programs are more widely available for low-income applicants, but 16 universities provide the option for everyone, regardless of state residency or family income. The College Matchmaker publishes a list of participating no-loan universities. Keep in mind, though, that “no loan” doesn’t necessarily mean “no debt.” In the interest of transparency, 30 colleges and universities have partnered with MyinTuition, an online calculator that provides a personalized cost estimate based on institution, need and no-loan policies.
  • Investing the difference. If my family is buying a household necessity, such as a dishwasher, we budget $1,000 and search for a model with a significantly lower price tag, then invest the difference in college savings. That strategy has enabled us to cut 10 percent across the board in household spending.
  • Using credit card rewards. Cash back earned from purchases I would make anyway is a painless way to invest in my son’s 529 plan. Depending on your credit score, there are several cards that offer cash-back rewards. Do some comparison shopping, pay your balances in full every month, and avoid cards with annual fees.

It’s still possible that my family won’t have enough to cover the entire cost of a college education. We’ll teach our son about personal finance to help him address his remaining college expenses with ownership and clarity.

Teaching financial literacy matters. A 2013 study by Laura Hamilton, a sociology professor at the University of California, Merced, found that although students who receive financial help are more likely to graduate, greater parental contributions were linked to lower grades overall. Perhaps what's missing from the equation of financial appreciation is financial literacy. The average college student doesn't understand money, and that may lead to it being more easily taken for granted.

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