How Sussex County families can prepare rising college costs

Parents are looking for ways to help their kids financially prepare for college as costs continue to rise. Today, it is 49% more expensive to attend a public, two-year college than it was 20 years ago. For a public four-year school, costs have increased 57% over the same time period. But there are ways to offset – or even cover – college tuition without taking out high-interest student loans. First Hope Bank President and CEO Dan Beatty shared five insider tips to best prepare families for the rising costs.

1. Get Free Advice from Your Local Financial Advisor

First Hope Bank has helped local families prepare for tuition costs – and all of life’s big expenses – for over 110 years. When planning for any major purchase, Beatty recommends visiting your closest branch to speak with a financial advisor. There’s no cost for consulting with First Hope’s financial advisors.

“They can assist with setting up a plan that helps reach your goal, whatever that goal may be,” said Beatty.

2. Make a Plan

One of the most effective ways to prepare for college tuition is by starting early with a 529 College Savings Plan. These state-sponsored plans allow parents to contribute money that grows tax-free and can be withdrawn tax-free for educational expenses.

A 529 plan “has all of the benefits of tax-deferred growth – and a long-term plan like that can make the investment much less daunting,” said Beatty.

Even small, regular contributions to a 529 plan can make a significant difference over time due to the power of compounding interest. Starting when the child is young allows parents to spread out contributions and maximize growth.

And while its best to set up the plan early, “it’s never too late to fund the 529 plan,” Beatty said. “Don’t think that just because you didn’t do it when your child was in diapers, that you can’t do it while they are in middle school or even high school. Those tax savings are still available to you.”

First Hope Bank can guide parents through the process of setting up a 529 plan. Many plans offer a range of investment options, from conservative bonds to more aggressive stock portfolios, allowing families to tailor the plan based on their risk tolerance and the time until college enrollment.

3. Financial Aid

Financial aid and scholarships are great options for families to explore as students near their college years. Parents should familiarize themselves with the Free Application for Federal Student Aid (FAFSA), which determines eligibility for federal student loans, grants, and work-study programs. Completing the FAFSA early in the application season can increase the chances of receiving aid, as some programs have limited funding.

4. Financial Literacy

Teaching your kids about money and savings early on is a great way to set them up for success later in life.

At First Hope Bank, students can take advantage of free checking accounts with no ATM fees, and high interest savings accounts with no monthly service charge.

5. Alternative Loan Options

If college is around the corner, families can avoid having their children take on high-interest student loan debt by taking out a home equity loan or line of credit.

“Tapping that equity is often a cheaper way to access credit than through traditional student loans,” Beatty said. And because First Hope Bank is a community bank that utilizes local lenders, its home equity loans are “almost always best in the market,” said Beatty.

Get Started Today

Visit your local branch to speak to a financial advisor at First Hope Bank:

Sparta: 220 Woodport Rd. 973-729-8333

Andover: 161 Newton-Sparta Rd. 973-729-8333