Making Our Last College Payment!

My husband and I reached a milestone yesterday.
We made our last payment for our daughter’s bachelors degree. Caitlin is graduating from Juniata College in May and we’ve managed to pay for her degree — she double majored in business and Spanish — without taking out loans.  I should have bought a bottle of champagne to celebrate, but my husband and I had a half empty bottle of Pinot Noir on the kitchen counter so we drank that instead.
Every family approaches paying for college differently. Here’s what we did to reach this day:

We started saving early.

We set up Caitlin’s first college account when she was a baby and we did the same for my son Ben, who is a college freshman. We set up automatic monthly contributions for the college accounts. When we could afford it, we increased our regular contributions.
We were lucky that one set of grandparents was able to give each of our children $500 for Christmas and their birthdays for almost a decade. Nearly all that money went into the college accounts.

We invested wisely.

Until I switched over to writing exclusively about college, I was a financial journalist for about 15 years and wrote for such media organizations as Business Week, Money, Kiplingers, Bloomberg and Consumer Reports. I also wrote some financial books. Like all the other veteran financial journalists whom I know, I came to the conclusion years ago that the best way to grow money is to invest in a diversified portfolio of inexpensive index funds and then not panic when the markets drop. To get the maximum returns, I invested strictly in stock index funds for both my kids until they were in high school. Then I switched a lot of the college money to bond and money market funds.
Our college accounts grew larger than those belonging to the typical parents who panic and pull their money out of stocks when the market tanks and then put the money back in when stocks are soaring. This buy-high/sell-low mentality is a terrible way to invest for college or retirement!

We looked for college discounts.

Most schools provide students with discounts. I believe about 85% of students at private colleges, for instance, receive scholarships/grants from their schools. Both Caitlin and my son Ben received merit scholarships from their schools. It’s also important to look for schools with good financial aid practices.

Checked for other scholarships.

Beyond the merit scholarships many students receive automatically from their schools, Caitlin applied for a couple of extra scholarships from Juniata. She was a finalist for a full-ride leadership scholarship, which sadly she didn’t get. She did receive a Juniata scholarship for language majors, which helped defray some of the cost when she studied her junior year at the University of Barcelona. You can find scholarships from individual schools at

We had two children in college at once.

I wish someone had told me when I was in my 30s that you’re more likely to get a price break when you have two children in college simultaneously. If I had known that maybe my husband and I would have spaced the kids closer together. With two children in college for one year, however, our EFC dropped by nearly half. Because of that we received more money from my son and daughter’s colleges. That was worth about $7,500.

Caitlin became an RA.

I had urged Caitlin to apply to be a resident assistance for her sophomore year. She got the job, which meant we didn’t have to pay for her dorm one year, which was great. Another way to cut dorm/food expenses is to ask schools if they have coop living arrangements.

Our children are responsible for some expenses.

Both of our children must buy their textbooks and anything else they want while they are in college beyond tuition and room and board. I think it’s important for college students to have skin in the game. Both of my children have been very frugal in college, which I think will serve them well when they graduate. With Caitlin in Pennsylvania, I also saved a ton of money by getting her waived off our car insurance policy while she was away. We also got waivers when she was home for Christmas and spring break.

One more thing….

I am grateful that we started early saving for college because it helped to cushion unforeseen financial blows. We’ve had our share.  Last November, my husband’s hours at work got cut significantly.
I wish you all luck in trying to figure out how to pay your college tab.
Lynn O’Shaughnessy is the author of The College Solution and she also writes a college blog for CBS MoneyWatch. Follow her on Twitter.

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