Southland News

Saving for college is a shared responsibility between parents and students. For parents, starting early and choosing the right savings plan can ease the financial burden. For students, exploring scholarships, budgeting wisely and understanding student loans can help reduce costs. By working together, families can create a smart strategy to make higher education more affordable.

The parent perspective  

The sooner you start saving for your child’s college education, the better. Early planning allows you to take advantage of compound interest, turning small contributions into significant savings over time. It also reduces the need for student loans, easing the financial burden on both you and your child. Starting early gives you flexibility and peace of mind, ensuring you’re prepared when the time comes.

Not all savings accounts are created equal when it comes to college planning. A 529 plan is a popular choice because it offers tax-free growth and withdrawals for education expenses. Other options like a Coverdell Education Savings Account (ESA) and high yield savings accounts can also be useful. 

A Coverdell ESA allows tax-free savings for both K-12 and college expenses, offering more flexibility than a 529 plan. However, it has a $2,000 annual contribution limit and income restrictions for contributors, making it less accessible for some families.

A high yield savings account is another option that provides easy access to funds without restrictions. While it doesn’t offer tax advantages, it can be a good supplement for expenses that 529 or Coverdell accounts may not cover. Choosing the right mix depends on your financial situation and education goals. Many families use a combination to maximize savings and flexibility.

College costs can feel overwhelming, but breaking your savings into manageable goals will make it more achievable. Consider your child’s potential school choices, factor in tuition, housing and other expenses, and set a monthly savings target that fits your budget. Even if you can’t save the full amount, every dollar helps reduce future financial stress. Consistency is key—small contributions add up over time.

The student perspective

College is a big investment, and it’s important to understand all of the costs. Tuition, housing, meals, books and fees all add up quickly. Public universities tend to be more affordable than private schools, and in-state tuition is usually cheaper than out-of-state. Researching different options early on helps you and your family plan realistically and avoid surprises.

Scholarships and grants are free money for college, meaning you won’t have to pay them back. Many are based on academics, athletics, leadership or financial need. Start researching early and apply for as many as possible—even small amounts add up. Websites like Fastweb, Scholarships.com or your school’s guidance office are great places to start.

If savings and scholarships aren’t enough, student loans can help bridge the gap. However, borrowing should be a last resort, and it’s crucial to understand how loans work. Federal loans usually have lower interest rates and better repayment options than private loans. Borrow only what you truly need and have a plan for repayment after graduation to avoid overwhelming debt. Here at Southland, we’re dedicated to helping you achieve your educational goals. Visit our student loans page and click “Get Started” to explore the personalized options we offer to support your financial journey.

The joint perspective

Open conversations about college costs help both parents and students stay on the same page. Parents should be clear about how much they can contribute, while students should understand their role in covering expenses through savings, scholarships or part-time work. Setting realistic expectations early on prevents stress and ensures a solid financial plan.

College expenses go beyond tuition and housing—unexpected costs like textbooks, transportation and personal expenses can add up. It’s important to build a financial cushion for these extra costs. Parents and students should work together to budget wisely and find ways to cut unnecessary spending.

Navigating financial aid can be complex, but understanding it early makes a big difference. Both parents and students should complete the FAFSA (Free Application for Federal Student Aid) as soon as possible to access grants, work-study opportunities and low-interest loans. Researching school-specific aid and knowing deadlines will help maximize available funding. You can learn more about FAFSA by visiting the Federal Student Aid website for more information.