4 ways to encourage your child — and protect your retirement savings.
If you’re a parent looking for ways to pay for college without taking out student loans, convince your child to apply for scholarships.
Scholarships are one of the best ways to pay for college without ruining your finances. And they don’t need to be repaid. You can find scholarship opportunities and free money for college from your state, your employer, or philanthropic organizations.
Here are four ways you can encourage your student to start applying for scholarships.
1. Explain the benefits
For starters, explain to your child that every scholarship they earn means less money they’ll have to borrow.
Walk them through this scenario: Instead of $5,000 worth of scholarships for their freshman year, they’re forced to take out a $5,000 student loan. With a 10-year repayment term and 6.00% interest rate, they’ll be looking at repaying $6,661, according to our student loan payment calculator.
Show your child other ways they could benefit. A big scholarship could help them afford a school that would otherwise be out of their reach, for example. It could also strengthen their résumé if they hope to land a summer internship.