Ready For Your Child’s College Tuition?
13 Aug 2019 | Back to Blog
Finding the money to pay for your child’s tertiary level education can be a very daunting experience, especially if the proper planning is not put in place. Many students come out of high school with spectacular exams results and GPAs but are unable to further their studies because their parents can’t afford it. According to collegedata.com, the average cost of tuition and fees in the US for 2018 was US$34,740 for private colleges, $25,620 for out-of-state and US$9,970 for state residents. Locally, the typical undergraduate program is upwards of US$10,000. You don’t have to be a millionaire to send your kids to college! All it takes is proper financial planning and research. You may find the following tips useful with preparing for your child’s college tuition:
- Start Investing from Preparatory/Primary School
Getting an early start with investing is a vital step in raising enough funds for your child’s college tuition. Placing your child’s savings in higher yielding instruments, with low levels of risks, will accelerate the rate at which your investments grow. Start with at least JMD$10,000 as your principal and continue to put the same amount aside every month for the next 10 years into a financial instrument that yields more than the rate of inflation annually. This would boast your investments to around JMD$1.5 million dollars after ten years. Some of these instruments include Government of Jamaica (GOJ) Bonds, Equity Unit Trusts and Bond Unit Trusts. As a rule of thumb, subtract your child’s age from 100, e.g (100-12=88) place 88% of the funds into the equity unit trust and 12% into the bond unit trust. Allocation across these two assets will help to diversify your investments and reduce risks.
- Apply for Government Grants, Scholarships and Other forms of Financial Aid
Apply, Apply and Apply Again! Applying for one scholarship is not enough. You should apply for as many Government Grants and Scholarships as possible to increase the chances of being approved. Some of these scholarships include the UWI Open Scholarship, Caribbean Actuarial Scholarship, NCB Foundation, Carreras Scholarship and the GraceKennedy Foundation.
- Taking a student loan
This is probably the most utilized method of financing for college, however, this should be the last option if all else fails. A student loan should only be used as a buffer for the shortfall in investments for tuition.