Ways Parents Can Pay For Their Kids’ College

Smiling graduate with her parents celebrating graduation outdoors, showcasing student loan success.

BIG Ideas:

  • The cost of college has increased by more than 90% over the past two decades.
  • Understanding savings options and creating a budget can help you better prepare to meet those school bills.
  • Having a talk with your child about college costs and your expectations for their financial commitment can help ensure there are no surprises later.

Your child’s journey to college is so much more than an academic milestone. It’s a reflection of all your years of hard work, support, and love – and of course, the start of your child’s pursuit of their own goals and dreams.

But as exciting as college planning is, it can be overwhelming for parents, especially when you consider the soaring expense of higher education. The average cost of college (tuition and fees) per year has increased by more than 93% from academic years 2005/2006 to 2025/2026.

That leaves many parents with a pressing question: how can you help make it possible for your child?

Here are nine ways:

  1. Open a 529 college savings plan. A 529 plan is a tax-advantaged investment account to help families save for a student’s (or beneficiary’s) college expenses. Any earnings you make on 529 plan assets grow tax-deferred, making it easier to accumulate funds. In addition, if you use the funds in a 529 plan for qualified educational expenses (including tuition & fees, room & board, books and equipment, and other school-related expenses), withdrawals are tax-free. Keep in mind that 529 plans are state-governed and, thus, vary by state. Consult with a tax professional to learn more.

  2. Know the costs of college. Homework isn’t just for students. As a parent planning for college, it’s important that you understand the costs involved with college. Begin researching using resources like the U.S. Department of Education’s Net Price Calculator Center or College Scorecard, where you can search by location, degree type, and annual cost.

  3. Budget for college. Understanding the costs of schools will help you take the next important step in the planning process: creating a budget. To accomplish that, look at your monthly expenses and income to see how much money you could potentially save for college. Obviously, if your student is years away from college, you have more time to build your college nest egg. If college is closer for your student, you’ll need to maximize your college savings.

  4. Ensure your child understands the cost of school. Your student should understand that college is a very large investment. This provides a great opportunity to teach them about the importance of saving, budgeting, and even borrowing if they will need student loans.

  5. Foster strong study habits. Students with better grades are more likely to get scholarships and grants (FREE MONEY!) that can greatly reduce the cost of college for you and for them. Research scholarships and grants, and encourage your child to apply.

  6. Understand federal aid. A key part of your college planning when your child nears college age is applying for federal aid, which includes grants, loans, and work-study. To apply for financial aid, you must complete the Free Application for Federal Student Aid (FAFSA).

  7. Learn the types of student loans. When it comes to financing college, you have two options – federal loans (from the government) and private student loans (from banks, credit unions, and other private lenders). Before applying for private loans, maximize all federal aid. If there’s a difference between the cost of college and the federal aid you receive, you may need to apply for a private student loan. To get a private loan and the best possible rates, you’ll need a steady income and a strong credit score.

  8. Support your child every step of the way. Ask your child about their future goals and explore college options with them by visiting campuses and talking to other students and parents who are familiar with the schools your child is interested in.

  9. Have the money talk. As your child starts planning for college, make sure they not only understand the costs involved but also the role they need to play to afford school. For example, let them know how much money, if any, you can contribute and what they may need to do, such as getting federal loans. Knowing the expectations upfront can help ease the burden and ensure there are no surprises for them later.

As a parent, you want to give your child the best chance for financial success and independence, long after college is over. One thing you never want to do is sacrifice your own financial security. Think long and hard about using home equity loans to pay for school or withdrawing money from your retirement funds. Your financial security matters, too.

Brazos Can Help Make College Planning Easier

For more than 40 years, Brazos has helped make college costs more affordable for parents and students. As a Texas non-profit lender, we offer competitive rates on private student loans that can help you save. Contact us to learn more.