Financial Prep for College: A Guide for High Schoolers

Financial Prep for College: A Guide for High Schoolers

Planning for college during high school can be both an exciting and rewarding time, but in many cases, the process can be stressful. Whether you’re a freshman going on campus tours and taking SAT prep classes, or a senior sending in your final applications and making the decision of where you want to go to college, prioritizing a plan for each step of the way is vital. One important aspect to focus on during the time you’re planning is your financial prep for college. 

With the possibility of student loans on the horizon, as well as other expenses related to college life, you’re going to need to be prepared for these costs. However, by following these tips on financial prep for college, you’ll be able to get your budget ready before your first semester and feel ready to take on the next four years.

Estimate Your College Costs

Many expenses accumulate while you’re attending college, so it could be beneficial to calculate the total amount that your school is going to cost you. Ask your parents if they have access to your financial aid, loan, and tuition accounts. You can also talk to your school guidance counselor and have them help you get set up.

There are some major expenses you’ll need to be aware of well in advance of your first semester. The biggest one will be tuition payments. Grants, scholarships, family savings, work-study, and loans can all help cover them. They vary widely depending on whether you attend a community college, a public university, or a private college. Whichever school you decide to go to, having an idea of the average tuition is going to be important.

Another factor to consider during financial prep for college is housing. Colleges list housing and food separately from tuition in their estimated cost of attendance. However, depending on if you’re going to stay on campus, live at home, or rent a place off-campus, your expenses are going to vary. Taking housing costs into consideration can give you a fuller picture of how much college is going to cost you.

Finally, you should also know what you’re going to be spending on day-to-day life while you’re away, such as snacks, social events, and more. By painting a full picture of how much college will cost you, it can give you the incentive to start saving more for college, leaving you better prepared financially in the long run.

Understand Financial Aid Before You Apply

Financial aid can change what a college actually costs your family, so learn how it works before you finalize your list. Aid generally falls into two categories.

• Need-based aid depends on your family’s financial situation. Colleges and the federal government use the information your family reports to decide how much support you qualify for.
• Merit aid rewards achievements such as grades, talents, or leadership, regardless of financial need. Not every college offers it, and policies vary widely.

Two forms matter most. The FAFSA is the application for federal student aid, including grants, work-study, and federal loans, and many states and colleges use it to award their own aid too. [3] The CSS Profile, run by College Board, is used by many colleges and scholarship programs to award non-federal institutional aid. [4] Check which forms each school on your list requires and note every priority deadline, since some colleges set aid deadlines earlier than their application deadlines. Our guide to CSS Profile schools lists which colleges ask for it.

Use Net Price Calculators to Build Your College List

The published price of a college is rarely what most families pay. Every college’s website includes a net price calculator that lets you enter information about your family and see what students like you paid in a recent year after grants and scholarships. [5] Running these calculators early, ideally in junior year, helps you spot schools that may be more affordable than their sticker price suggests.

Sit down with your parents or guardians and run the calculator for several schools on your list, including at least one public option and one private option. Compare the results, then talk openly about what your family can contribute and how much borrowing, if any, feels reasonable. Those conversations are easier in junior year than in April of senior year, when acceptance letters arrive.

Use what you learn to shape a balanced list. Include schools where you are a likely admit and where the estimated net price fits your family’s plan. For more strategies, read how to maximize financial aid for college and how to make a college list.

Organize Your Finances

Once you have an idea of your expected costs, you can start taking steps to prepare and organize your finances. One thing you should do first is to get familiar with your student loan accounts and information, as well as any scholarships or grants you have. [1] Most of these have online accounts you can get access to once you apply. This will allow you to keep track of your loan and grant balances and stay up to date on any changes.

Before attending college, gain some knowledge of the status of your credit score. While your parents could co-sign on any loans you have, your credit score will remain important in college and after graduation. [2] If you don’t have any credit, talk to your parents, or a financial counselor about getting a secured credit card. A trusted adult or financial counselor can help you decide which option, if any, makes sense for you. The longer you build your credit, the better your score will be, so these are great ways to start building your credit at a young age, giving you a head start to a higher credit score.

If you don’t have a checking account to utilize before going to school, look into a safe and reliable option. This will give you a place to start saving money on your own and help you learn financial independence–as well as the opportunity to use a debit card. Along with an expense tracking tool or budgeting calculator, an online bank account can give you the opportunity to manage your money directly from your smartphone while on campus, and without needing to go to a physical bank to update your account or make deposits.

Start Budgeting

After you’ve calculated your costs and organized your finances, it’s time to work on the budget itself. This process should be about breaking down all of the costs you expect to incur throughout college, divided up by semester. Here’s an example of what your breakdown might look like:

This should give you a rough idea of how much money you’ll need per semester, both in terms of tuition payments, and day-to-day expenses. You can then use this budget to keep yourself from overspending each semester and keep your costs low. To track your budget, you can use spreadsheet software, personal planner, or budgeting app!

Save What You Can

Finally, it’s no secret that college is going to be one of the biggest expenses in your life. Therefore, it’s vital that you begin saving early in order to be ready for it and find ways to reduce costs as much as possible.

If cost is a major concern, one  significant way to reduce them is by going to a school in your hometown. This will allow you to commute to class instead of paying for campus dining services and dorms. You can also opt for a local community college, which is often a far lower cost than a four-year state or private school. All of the options have the benefit of greatly reducing the total cost of college, while still giving you access to a great education and credits.

If you do decide to take a different approach that will be a bit of a higher cost, there are some good options available to save money. One way is by applying for grants and scholarships. There are many different ones provided, whether directly through a university or through your high school and other extracurricular programs. Our list of scholarships for 11th graders is a good place to start. Some even offer a full-ride scholarship, depending on things like your GPA, SAT scores, and other factors.

You can also apply for work-study, which will help give you extra money during college. If you don’t qualify for a work-study, finding work off-campus is also an option if you have access to transportation. If you have a summer job, consider putting some of that extra cash away into your savings account to go towards your college fund. Getting an early start on saving is going to be a good way to be financially ready for your first semester.

While your undergrad  is going to be costly, there are a lot of great ways to financially prep for college while still in high school. By getting a head start and learning some financial management skills early, you’ll be ready to take on university with confidence, and reduce the financial stress associated with student loans and other costs.

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