Back in high school I had a lot of friends who I played baseball with, and many of them had dreams of pursuing the sport at the college level so they could eventually move on to the MLB. One friend in particular had offers from many schools, however the schools that offered him a spot on their teams did not offer a scholarship with the spot.
Because of this, he had to reject these offers due to not being able to afford their expensive tuition. Instead, he pursued community college and played there to see if he couldn’t improve and receive a scholarship offer somewhere. Unfortunately, this was the beginning of the end of his baseball career, and it all started with not being able to afford tuition. A sad story, but one I believe is important because it shows how important proper financial planning is for your children.
Many adults are parents to athletic children who have big dreams of playing professional sports. To do so, a majority have to head through college athletics first. Often these college sports careers come with financial scholarships. However, these are not a guarantee, and no parent wants to see their child receive an offer to play in college but have to turn it down because they cannot afford the university’s tuition. This is where financial preparation comes in handy.
It’s always better to save money you have before you need it, especially for something as costly as college tuition.
Financial aid is also a great way to lessen the burden of paying for college, but it is not as accessible as it seems. Only about 34 percent of students qualify and receive federal loans from FAFSA. Also, financial aid is dependent on expected family contribution. This means that if your parents or family members are willing to pay half of your tuition, you are only eligible to receive half your tuition in the form of financial aid, and even then that is very rare and can leave you with less money than you need. It’s tough to focus on success when the weight of student loans can weigh you down for years and years after graduation. Because of this, the best way to save for college is with a 529 plan. This plan grows tax free over the course of your child’s lifetime. The reason it’s tax free is because the government understands the cost of college and provides this plan as an incentive in order to encourage the population to pursue higher education. Also, only 5.64% of the growth, not overall value, of your 529 can be considered expected family contribution. This means financial aid is still an option on top of a 529 plan! Even if your child does get a scholarship, perhaps even a full ride from the university, the money in their 529 account can still go towards supplies and equipment such as a computer, housing costs, or textbooks!
Every parent wants to see their kids succeed, and what better way is there to ensure the possibility of success than a strong financial foundation for higher education?
Alternative to Scholarship
That’s where U-Nest can take some of the weight off of your shoulders. U-Nest is a mobile app platform, run by professional financial advisors, which makes it extremely simple to start a 529 plan and help it grow. This helps set up your child for a great future, no matter what their passion in life may be! So, while scholarships are the most effective way of lessening the cost of college, you do not want to risk your child’s future on money that may or may not be guaranteed.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.