What to Do If You Didn't Save for Your Child's College

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They say children grow up fast, but that couldn't be any truer for parents who suddenly find themselves looking at college applications and admission costs.

Perhaps you always meant to save money for your child to go to college, but with all the other bills and expenses, you were never able to. Here are some tips on how to approach college costs now.

Start With the FAFSA

The first place to start is to complete the Free Application for Federal Student Aid (FAFSA) application. Even if you believe that your household income is too high for student aid, you will still need to complete the FAFSA to qualify for federal loans. The FAFSA will give eligible students access to free grant money for college, as well as federal loans. The FAFSA can even connect eligible students to work-study programs for another way to help fund schooling.

The FAFSA must be completed every year, Also, it is best to apply as early as possible, since some colleges award aid on a first come, first serve basis.

Start With Junior or Community College

If your child has their hopes set on a fancy university on the other side of the country, then they will probably not like the idea of attending a local junior or community college first. Still, community colleges are significantly cheaper, and children can further save by living at home. And most general education credits can transfer to your child's university of choice.

A community college will shave up to two years off the expensive price tag of a university. Plus, if your college-bound child is not 100% sure of their career path, a community college can buy them time to figure it out, without paying the full sticker price of a university. A lot of maturing and life-changing events can happen after high school, and your future potential lawyer might decide they would rather teach in underprivileged areas, instead. Changing your major can be a huge money waste when you do it at a costly university.

To be certain of community college credit transferability, visit ASSIST, which shows which credits transfer between California community colleges and California State Universities. Check with your local community colleges if they use a similar website or conversion chart, to make sure your child is taking the right classes. It is also a good idea to talk with your child's top university choices about transferring from a community college to see what they require. (See also: 8 Part-Time Jobs That Offer College Benefits)

Scholarships Are a Viable Option

Scholarships can certainly help reduce the cost of your child's college admission. However, it is best to have a healthy expectation when you first approach your scholarship search. First of all, it is very unlikely that your child will get offered a full ride, unless they have a very unique profile that makes them especially appealing to schools. A school's top soccer player who has excellent grades is obviously more likely to earn scholarship offers than a non-athletic student with average grades.

Look for smaller, local scholarships, which have a less competitive edge. Also, if your child has a part-time job, there might be scholarship options available through that company. (See also: How to Increase Your Child's Odds of Winning a Scholarship)

Just Say No to the Parent PLUS Loan

We know you want the best for your child and would do anything to grant them success, but tying your name to costly student loan debt can put your retirement at risk. This goes mostly for Parent PLUS loans, though it is a good idea not to co-sign loans for anybody, in general.

Trying to pay off a child's student loan debt when you are so close to retirement can derail you financially. Also, PLUS loans are not eligible for any loan forgiveness programs.

Know About Loans and Loan Forgiveness Programs

Before your child signs up for the first loan they are offered, do some research on specific loans and loan forgiveness programs. For example, if your college-aged child wants to pursue teaching, then getting a Perkins Loan can offer the best loan cancellation program. The Federal Teacher Cancellation for Perkins Loans offers 15% loan cancellation after one year of teaching in a low-income area, and teaching five years will qualify for full loan forgiveness.

Know that private loans will also be easier to secure, but these loans do not qualify for loan forgiveness programs or income-based repayment plans after graduation. You might need to get some private loan funding, but make sure to use federal loans first, since these have the most benefits. Before signing up with a private lender, thoroughly investigate their repayment policies and rules on loan deferment (which allows the borrower to momentarily pause payments if they continue their education or serve in the military or Peace Corps).

How are you handling the college costs of your children?