Experts recommend families should start planning for college no later than middle school. Up until this point, your focus has been on saving for college. But, as your child gets closer to high school age there are opportunities to start preparing for college academics, financial aid and even college life.
Here are steps you can take to prepare for college during middle school and your child's first 2 years of high school.
Adjust your college savings strategy
It’s important to review your college savings strategy when your child enters middle school. Consider lowering the equity exposure in your 529 plan and increasing your allocation to more conservative investments, such as bonds, CDs and money market funds.
With a shorter investment time horizon, there is less time to absorb the risk associated with investing in stocks. If the stock market were to drop significantly within the next 3 to 7 years, there may not be enough time to recoup the losses in your portfolio and your savings may come up short. An appropriate equity allocation for a child between 11 and 15 years old is around 60% to 40%, depending on the 529 plan account owner’s tolerance for risk.
If it looks like there’ll be a shortfall in reaching your college savings goal, consider increasing the amount you save each month.
When your child enters high school, it may be time to switch new contributions from an out-of-state low-fee 529 plan to an in-state 529 plan, if your state offers a state income tax break based on contributions to your state’s 529 plan. There’s an inflection point around the time a child enters high school when the financial value of the state income tax deduction or tax credit is worth more than the lower fees of an out-of-state plan.
Start thinking about financial aid
Your child will be able to complete the Free Application for Federal Student Aid (FAFSA) beginning October 1 of their senior year of high school. However, there are steps you can take in middle school and the first 2 years of high school to maximize your child’s need-based financial aid eligibility.
A family’s income typically has the greatest impact on a student’s financial aid eligibility. However, income is reported on the FAFSA on a prior-prior year basis. So, any income from January 1 of their sophomore year of high school through December 31 of their sophomore year of college will be reported on the FAFSA (assuming your child graduates in 4 years).
Families should take any moves that affect income, such as realizing capital gains from selling investments or taking distributions from a retirement plan account, before January 1 of their child’s sophomore year in high school.
Meet with the high school counselor
Students can meet with their school counselor during their freshman or sophomore year of high school to discuss their academic performance, what classes and electives they should take and which colleges to consider. School counselors can also recommend extracurricular activities and volunteer opportunities that can help prepare your child for college.
Consider dual enrollment or AP classes
Dual enrollment and AP classes allow your child to earn college credit while in high school. Students generally take dual enrollment or AP classes during their junior or senior year, so they should begin discussing their options with a school counselor during their freshman or sophomore year.
Both dual enrollment and AP classes can help a student save money on college tuition, but there are different requirements for each. AP classes prepare students to take the AP exam. If the student scores high enough on the AP exam, they may earn college credit or qualify to take advanced courses as a college freshman. Students take dual enrollment classes in place of a high school class and must earn a grade of C or better to earn college credit.
Touring a college campus during your child’s freshman or sophomore year can help determine if the college is a good fit for them before they begin the admissions process. A college visit gives your child the chance to meet face-to-face with the financial aid and admissions staff, and also meet current students and faculty. Exploring the college’s dorms and the dining hall will give your child an idea of what life is really like on campus.
Some questions to consider asking on your college visit include:
- What qualities does the college look for in incoming students?
- What is the college’s retention rate after freshman year?
- Does the college offer good work-study opportunities?
- Does the college offer career services?
- What percentage of freshman are accepted through early admission?
- What services are offered for students with general academic and life issues?