You Can Afford College — A Financial Fitness Initiative
No matter who you are and what your financial circumstances are, there are ways to pay for college. That’s the message the VSCPA aimed to send with its “You Can Afford College” workshops, held across the state in partnership with three Virginia senators and with financial support courtesy of a generous grant from The Accountants Coalition.
The VSCPA partnered with Virginia Sens. Mamie Locke (D-Hampton), Louise Lucas (D-Portsmouth) and Donald McEachin (D-Richmond) to hold the events in Hampton, Portsmouth, Richmond and Surry. The first three events corresponded with Virginia CPA Week from Sept. 13–19. Click here for a summary of the initial events and read on for more information and resources on college affordability.
The Reality of the Cost of College
- The average tuition, fees, room and board at a public, four-year, in-state institution come to $18,943 per year. That doesn't include books, supplies, transportation and other costs.
- 70 percent of today's college students graduate with student loan debt. The average debt load per student is $35,051.
Forty-five percent of parents plan to dip into their savings to pay for their child's college costs. The same percentage plan to rely on aid.
How to Pay for College
If you're far enough out, 529 plans are a good way to save for college because they offer tax-deferred growth. Virginia taxpayers can deduct up to $4,000 in 529 contributions per account each year, and the money can be used in other states if you move. There are two types of 529 plans:
- Prepaid tuition plans let you prepay tuition expenses for future use
- College savings plans let you save money for college in an individual investment account
Many students qualify for financial aid, which consists of:
- Grants: Primarily need-based financial aid that does not have to be repaid
- Loans: These may be subsidized (need-based) or unsubsidized (not need-based) and must be repaid with interest
- Work study: A need-based program through which students earn money to help pay for school
Always apply for financial aid to see what you qualify for — and apply early!
Scholarships are another way to help defray educational costs. These are student-specific and can be need-based, merit-based and career-specific.
How to Save Money on College
Students can also save money on college by finding the best deal and saving money in other ways, such as:
- Attending an in-state public school
- Attending community college before moving on to a four-year college
- Earning college credit by taking Advanced Placement or International Baccalaureate classes in high school
- Attending a local school and living with their parents
Other general tips:
- Begin saving as soon as possible! Saving $50 a month from birth to 18 at a 6 percent rate of return yields $20,000.
- Take advantage of any tax breaks available to you, possibly including:
- American Opportunity Credit ($2,500 for the first four years of post-secondary education)
- Lifetime Learning Credit ($2,000)
- Tuition and Fees Deduction ($4,000 deduction)
- Student Loan Interest Deduction ($2,500 deduction)