5 Resources to help Latino parents save for college education

College education is an alternative for many Latino families to help their children climb the social ladder but a very hard one when it comes to saving and paying for it. Here’s some insights and resources to make the task easier. 

When we arrived to the US in 1990, I was 40 years old and had a career as a college professor which I left behind in Argentina. I knew a college education was the most important step in achieving better paid jobs so I decided to go back to school and work towards a second Masters degree, which I finished painfully in 1995 thanks to multiple scholarships my alma mater, Monmouth University, granted me.

My children were 9 and 13 at the time of our arrival and I had little knowledge of what would entitle for them to attend a paid college. Unlike Argentina’s public universities, which offer free higher education, the United States has a paid system that is on the rise and its high cost is preventing a lot of young people from accessing higher education.

 However, that was not the case in the 19^th Century United States, when California state colleges and universities –the largest in the nation at the time- were tuition-free, as were many educational institutions around the country. “Ronald Reagan made the University of California a major punching bag of his 1966 campaign for governor of California, with the encouragement of FBI director J. Edgar Hoover, who saw campus peace activists as dangerous subversives,” Monster College reports. Upon taking office, he imposed a new fee that became the starting point for college tuition around the country.

 Latinos and college education

Latinos are the youngest demographics in the United States and the group with higher fertility rates. Consequently, young generations of Latinos are entering the workforce at staggering rates. Despite an increase in college registration, Latino college completion is still low in states highly populated by Hispanics.

According to ¡Excelencia in Education!, “Latinos will need to earn 5.5 million more degrees by 2020.” However, the big barrier continues to be funding for college, and families need to learn more about their options to send their children to college.

So why are parents not saving enough? Is it because they have poor saving habits or because they aren’t aware of the options they have?

“Experts on the cost of higher education and student debt say these are the wrong questions to ask. Yes, some parents could increase their savings or choose a 529 account, but poor parents have very little, if anything, to save, and middle class parents are often forced to choose between saving for retirement and saving for their child’s college tuition,” says a report from Think Progress.

Asked why they aren’t saving for college, 58% of non-saving families (more so for middle- and low-income families) say it’s because they don’t have enough money, 22% say they expect their kids to qualify for enough financial aid or scholarships to cover the cost and 21% say they haven’t gotten around to it. Interestingly, significantly more high-income families (21%) than middle- (13%) or low-income (5%) families say that they aren’t saving for college because they think it is their child’s responsibility to pay for college. Market Watch

What are your options? The nuts and bolts of college tuition

“One of the biggest life events parents face and don’t plan adequately enough for is their children attending college. Saving for higher education is a daunting task, but breaking it down may help. Rising costs and saving enough are two main concerns that you should take into account,” says financial planner Anthony Privetera.

However, there are resources out there that might help you with planning adequately, even if you think you cannot save enough for your children’s future. Let’s start with the basics:

1. Colleges charge tuition for the instruction:

Colleges charge tuition by a semester or quarterly. For residents of any state, public colleges offer lower tuition rates but out-of-state residents usually pay double the tuition of residents. When you are working with your child to choose a college, choose wisely from a variety of public in-state universities and community colleges that might help you save money.

While most states have low-cost options for in-state students, if your child plans to go out of the state or into a private school, be prepared for a big jump. College Data provides some great insight into these choices, if you want to learn more.

Tuition also varies by field of study or major. Depending on the college, students in the sciences, engineering, computing, pre-med programs, and the fine arts might pay more. However, your child might have options to complete basic requirements with and “undecided major” or complete a 2-year program at a community college with courses that might be transferable to a 4-year degree college.

2. Colleges charge fees for services:

   

This is “sweet money” colleges charge that might include using the library, for in-campus transportation, student government, and athletic facilities, even if your child is not into sports. How can a student prepare his/her classes without access to the library? Anyway, colleges usually include fees with tuition but you can request an itemized report for all these expenses.

3. Colleges also offer “room and board”:

The cost of room and board depends on the campus housing and food plans you choose, and there are usually several options, including living on and off-campus. It might be very exciting for your child to live on campus where all the “action” happens but make them understand that that option might not be available for them at this time if they really want to pursue a college education.

If you choose your child to commute from home –my son did it for a year until he got a job to pay for his own living expenses–, consider transportation cost and food at home.

4. Colleges will estimate the cost of learning materials and other expenses:

Some colleges might include the cost of learning materials such as a computer, its accessories or text books. They might also estimate personal items, local transportation outside campus, clothing, etc. Again, ask for itemized explanation of costs, especially if your child can bring his/her own device.

The sticker price of college may seem overwhelming, but choosing the right option for your child can make a great difference and financial aid can greatly reduce your cost.

Check this college saving calculator provided by SavingforCollege.com and get a report with the estimated money you will need to save along these years until your child is ready to go to college. I like this planner because it gives you options on saving money if you decide, for instance, that your child will be living off campus. You can also add each of your children with their respective ages. The younger your child, the larger the money will grow, helping you achieve your goals.

5. Scholarships and grants

The federal and state governments as well as colleges and other non-profit/private organizations all provide assistance, each with their own process.  The Federal Student Aid office of the US Department of Education has an excellent site that helps you understand where to start.

Scholarships and grants are often called “gift aid” because they are free money—financial aid that doesn’t have to be repaid. Grants are often need-based, while scholarships are usually merit-based. According to Federal Student Aid, aid can come from:

• The U.S. federal government,
• The state where you and your child live,
• The college they attend, or
• A nonprofit or private organization.

My daughter finished her Humanities Doctoral degree with a Mellon Fellowship from The Andrew W. Mellon Foundation at University of Pennsylvania, which saved her a lot of money in college tuition repayments.

Besides financial aid, you have other ways to lower costs when your children go to college that might not be of your knowledge.

Financial aid is available
“Besides the sticker shock, you also have to take into account that the price of colleges has increased, on average, by 8% over the last 30 years according to the National Center for Education Statistics numbers. Starting to save early definitely adds up here, since it’s an uphill battle for parents. Every dollar you can save earlier will decrease your child’s loan payment once they are out of school,” said Privetera.

The financial planner suggests that parents start thinking about college options after high school sophomore year –when your child completed freshman and junior years. Once you’ve made it through the first two years of high school with your child, making sense of the financial aid available is just as important as the majors and classes you will be looking at.

“Consider looking at educational savings plans. The most popular are 529 College Savings Plans and Coverdell Savings Accounts. They are sometimes misunderstood but those who take advantage of the power of starting early can really make a difference,” expert financial planner Privetera said.

More information can be found at the following link:

• 529s: 10 Little-Known Facts About The Popular College Savings Plan

All these options were established to give parents well deserved bonuses for planning for their children’s future. Understanding the challenges ahead and making choices now are important to making your child’s future brighter.

Are you aware of other options specifically for Latino students?

According to Financial Aid Finder, “there are hundreds of thousands of dollars in grants available for Latino Americans from non-governmental enterprises.  From not-for-profit organizations to major private companies, those that offer these so-called niche grants require students to demonstrate financial need, as well as to match certain requirements.” These requirements may include students to excel in their academic performance –a minimum GPA of 3.0 or higher– and/or a particular planned field of study. Programs are typically highly competitive but not impossible to access.

Here is a list of some of the many nation-wide grant opportunities for Latino students:

• The Hispanic College Fund (HCF) awards nearly $2 million a year to over 600 Hispanic American students nationwide.
• Sodexho awards eighteen $5,000 annual grants to promising young Hispanic students. All candidates for the HCF program will automatically be considered for the Sodexho program.
• The Sally Mae Fund First in My Family program awards $500,000 annually to Hispanic Americans who are the first in the family to attend college. Individual awards range from $500-5000 per student, per year.
• The Association of Latino Professionals in Finance and Accounting (ALPFA) awards $150,000 per year to Hispanic American students with a minimum 3.0 GPA pursuing a major in accounting, finance, information technology or a related field. Individual awards range from $1,250-10,000 per student, per year.
• The Google Scholarship Fund awards twenty individuals a $10,000 grant to pursue studies in computer science or engineering. Grantees must have a minimum 3.5 GPA and be outstanding juniors or seniors, Master’s or PhD students.
• The Kaiser Permanente College to Caring Program provides six outstanding Hispanic American nursing students in their juniors or senior year with an $8,000 annual grant. Grantees also receive a $2,000 stipend toward a work-study program at Kaiser Permanente in California.
• The Hilton Family Diversity program awards ten renewable $2,500 grants each year to deserving Hispanic students attending any four-year college or university within the United States. Grantees are also invited to attend the annual Hilton Scholars Retreat.
• The Lockheed Martin program awards $90,000 per year to Hispanic American students pursuing degrees in business administration, science or engineering. Individual awards range from $500-5000.
• The Los Padres Foundation awards two $5,000 grants per year – for one outstanding male and one outstanding female Puerto Rican or Latino student pursuing a graduate degree.