Paying for College
How to Plan, Prepare and Pay for College

Submitted by ltownsend on June 13, 2022


Like many milestones in life, preparing to go to college requires planning and saving. Planning for college attendance begins well before any admission applications are submitted. Some say as early at ninth grade.


Early planning is essential. These action items should be on anyone’s list for college preparation, and many have deadlines associated with them:

-    Participate in extracurricular activities and academic achievements for college applications.  School books and money bag
-    Investigate different degree paths and know which classes are prerequisite. 
-    Take entrance exams, commonly the SAT or ACT tests. 
-    Researching financial aid options. 
-    Visit prospective college campuses. 
-    Apply for scholarships.



Setting money aside for college tuition and expenses should begin early as possible for yourself or your child. 

  • Find the right savings product: To save for higher education, find a financial product that returns a higher-than-normal dividend rate. For example, an eligible 529 plan, certificate of deposit or high-yield savings account. There are two tax-advantaged 529 savings plans for future college costs: a prepaid tuition plan and a college savings plan. In the state of Kansas, these plans offer a variety of investment opportunities. Go to The College Investor for more information.
  • Tax credits are available through programs such as the Lifetime Learning Credit (LLC) and the American Opportunity Tax Credit (AOTC). These programs help reduce costs associated with college by lowering your income tax. The LLC program offers up to $2,000 a year as a tax credit for each eligible student for tuition, fees or supplies that need to be purchased through the school, for an unlimited number of years. The AOTC program helps defray the cost of higher education expenses for tuition, certain fees, and course materials for four years. It is a tax credit of up to $2,500 of the cost of tuition, certain required fees and course materials needed for attendance and paid during the tax year.

Note: To be eligible to claim the LLC or AOTC tax credits, a taxpayer (or a dependent) is required to have received Form 1098-T, Tuition Statement, from an eligible educational institution. (Please consult with a qualified tax professional for details.)

When savings won't cover the costs, the next step is to look for available scholarships and student aid.


Apply early, even as early as the summer before your child's senior year in high school. Some scholarship applications require essays while others do not. Scholarships applications may require memberships or associations in specific organizations, or requirements for age range, gender, field of study, financial need, etc. One site designed for finding scholarships is the U.S. Labor Department's site.  Another popular site is Let Skyward help you paying for college


Student Aid is available when savings  and scholarships don’t cover all the costs.

  • Fill out the online Free Application for Federal Student Aid (FAFSA) for Federal grants, work-study programs, and private loans. This program will help in finding appropriate grants and loans. Federal loans generally have lower interest rates and have loan forgiveness opportunities. Qualifying for federal aid isn't always based on need and doesn't have an income cut-off, and there is no disadvantage in applying. FAFSA applications submitted early in application year may have access to more financial aid. Applications are accepted beginning on October 1 through June, previous to the school year financial aid is needed. 
  • Any interest paid on a student loan used to pay for higher education expenses for you or your child is tax deductible up to $2500. Both private loans (not backed by the Federal government) and Federal student loans qualify for this deduction.

Additional help for covering the costs of higher education can include work-study programs, financial aid for specific groups (such as military families or ethnicity), and state financial aid programs. Whether you plan on saving for the expenses of higher education, or subsidizing it with grants and loans, start your plan as early as possible.