Whether your child is heading off to college or trade school this fall or in a few years, it’s never too early to plan for their education expenses. With the average cost of college continuing to rise, having a comprehensive savings strategy is more important than ever. The following seven strategies will help make higher education more affordable for your family.

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1. Complete the FAFSA early and accurately

The Free Application for Federal Student Aid (FAFSA) is your gateway to federal financial aid, and nearly every family should complete it. The FAFSA allows students to be considered for aid based on their family’s financial situation, and the information is sent to schools to determine financial aid packages.

 

Key FAFSA tips:

• The FAFSA now opens on December 1 each year

• Federal deadline: June 30

• Michigan state deadline: June 30

• Individual colleges may have earlier deadlines

• Have all financial documents ready before starting

• Complete the FAFSA even if you don’t expect to qualify for need-based aid because many merit scholarships require it

 

The 2024-25 FAFSA brought major changes, including a simpler form and a new way of calculating aid – making it easier for families to fill out.

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2. Maximize your 529 Education Savings Plan

529 plans are tax-advantaged savings accounts designed specifically for education expenses. If you’ve already started one, excellent! If not, it’s never too late to begin.

 

529 Plan advantages:

• Tax-deferred growth on investments

• Tax-free withdrawals for qualified education expenses

• High contribution limits (up to $500,000 in Michigan)

• Can be used for K-12 tuition (up to $10,000 annually)

• Covers trade schools and apprenticeship programs

 

NEW: Unused funds can be rolled to beneficiary’s Roth IRA (with conditions)

 

2025 contribution guidelines:

• Annual gift tax exclusion: $19,000 per individual, $38,000 per married couple

• Accelerated gifting option: Up to $95,000 per individual or $190,000 per married couple (treated as 5 years of gifts)

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3. Search for Scholarships Strategically

Scholarships provide free money for education – no repayment required! In 2023, approximately 58% of undergraduates received at least one scholarship or grant, with average awards nearly $13,000.

 

Top scholarship search resources:

• CareerOneStop.org – U.S. Department of Labor database with 8,000+ opportunities

• Fastweb.com – Free platform with personalized scholarship matching

• Scholarships.com – Database of 3.7 million scholarships and grants

• Unigo.com – Access to 3.6 million scholarship opportunities

• Going Merry – Streamlined application process for multiple scholarships

• Bold.org – No-essay scholarships and unique opportunities

 

Don’t forget:

• Ask each school about additional institutional scholarships

• Check with local community foundations

• Inquire about employer-sponsored scholarships (yours and your spouse’s)

• Research professional associations in your child’s intended field

 

4. Choose an affordable school wisely

The best way to manage education costs is selecting a school within your budget. Have honest financial discussions before your child applies to avoid disappointment later.

 

Cost evaluation tips:

• Use each school’s Net Price Calculator for estimates

• Calculate true cost: (Tuition + Fees + Housing) - (Scholarships + Grants)

• Don’t automatically exclude private schools – they often offer generous aid

• Consider cost of living in the school’s location

• Factor in transportation costs for in-state vs. out-of-state options

• Evaluate community college transfer pathways for significant savings

• Research online degree programs from accredited institutions

 

Remember: A school’s prestige matters less than what students do with their opportunities.

 

5. Pursue federal and state grants

Grants are aid that doesn’t require repayment and are often needs-based. Your FAFSA results determine eligibility for:

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Common grant programs:

• Federal Pell Grant: Provides up to $7,395 for the 2025–26 academic year to eligible undergraduate students with financial need.

• Federal Supplemental Educational Opportunity Grant (FSEOG): Offers additional federal aid to students with exceptional financial need, as determined by the FAFSA. 

 

Michigan-specific grants:

• Michigan Achievement Scholarship: Beginning with the class of 2023, this scholarship offers up to $5,500 annually for students attending eligible institutions in Michigan. 

• Michigan Competitive Scholarship: Awards up to $1,500 per year to students demonstrating both financial need and academic merit. 

• Tuition Incentive Program (TIP): Provides tuition assistance to students who were Medicaid-eligible for 24 months within a 36-month period between ages 9 and high school graduation. 

• Michigan Tuition Grant: Available to undergraduate Michigan residents with financial need attending Michigan’s non-profit independent colleges. 

• Kalamazoo Promise: For graduates of Kalamazoo Public Schools, this program covers up to 100% of tuition at many Michigan colleges and universities, depending on the length of attendance in the district. 

 

Institutional Grants from Colleges: 
Many Michigan colleges and universities offer their own need-based grants and scholarships. For example:

• Spartan Tuition Advantage at Michigan State University covers up to 18 credits of tuition per semester for qualifying full-time, in-state students. 

• Go Blue Guarantee at the University of Michigan provides free tuition for in-state students with family incomes of $125,000 or less and assets below $125,000. 

 

Always check with your school’s financial aid office about additional grant opportunities specific to their institution.

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6. Consider federal work-study opportunities

Federal work-study provides part-time employment for students with financial need, helping them earn money for educational expenses.

 

Work-study facts:

• Positions are typically on-campus

• Awards are need-based via FAFSA

• First-come, first-served at many schools

• Earnings paid via regular paycheck

• Cannot exceed your Federal Work-Study award amount

• Helps with day-to-day expenses rather than large bills

 

Submit your FAFSA early to maximize work-study opportunities.

 

7. Use federal loans as a last resort

If additional funding is needed after exhausting other options, federal student loans offer better terms than private loans.

 

Types of federal student loans:

• Direct subsidized loans - For undergraduates with financial need (government pays interest while in school)

• Direct unsubsidized loans - For undergraduate and graduate students (interest accrues immediately)

• Direct PLUS loans - For parents and graduate students

• Direct consolidation loans - Combines multiple federal loans into one

 

Federal loan benefits:

• Lower interest rates than private loans

• No cosigner required

• Flexible repayment options

• Potential for loan forgiveness programs

• Grace period after graduation

 

Remember: Borrow only what you need. Students can request additional funds later if necessary.

 

Planning ahead: Your next steps

1. Immediate actions:

• Open or review your 529 plan

• Mark FAFSA opening date (December 1) on your calendar

• Start researching schools and their costs

 

2. Ongoing tasks:

• Set up automatic 529 contributions

• Help your child search for scholarships

• Discuss college finances openly as a family

 

3.    Get professional help:

• Review your overall financial plan

• Ensure college savings align with other financial goals

• Schedule a consultation with your financial advisor

 

Making your college savings plan a reality

Funding higher education requires a multi-faceted approach combining savings, scholarships, careful school selection, and strategic use of financial aid. Starting early and staying informed about your options will help make your child’s educational dreams achievable without overwhelming debt.