How to Save for an Expensive College

I came into some money last year, and we put it into conservative mutual funds. My daughter is 14 and wants to attend a college where the tuition is the second most expensive in North Carolina. Is there anything my husband and I should be doing to prepare, and how can we get the most out of this money so we could get more financial aid?

--A Parent Soup member

Bruce Hammond

Bruce Hammond is an expert on college prep, applications and cost, and author of Discounts and Deals at the Nation's 360 Best Colleges and... Read more

With about five years to go before you need the money, conservative mutual funds sound like a wise move for the money you received last year. As time goes on, you should probably begin withdrawing some of that nest egg to put in a safer place and thus guard against a sudden market downturn in the years immediately before college.

If you want to know more about how the aid system works and how to maximize your potential aid award, I suggest that you check out either Financing College by Kristin Davis or Paying for College Without Going Broke by Kalman Chany. The most important determinants of whether and how much aid you will get are (1) your income in the calendar year before the student goes to college and (2) which college your daughter chooses.

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