Smart choices about where and how you learn and live can significantly reduce college costs:

• Start at community college: Save thousands by completing initial courses at a local community college before transferring.
• Live smart: Skip the dorm! Living at home or with roommates off-campus is much cheaper than on-campus housing.
• Cook your own meals: College meal plans can be expensive. Preparing your own food is often more affordable.
• Choose cheaper textbooks: Save big by opting for digital versions or renting textbooks instead of buying new ones.
• Work part-time in your field: Earn money, gain experience, and potentially reduce your need for loans. Look for employers offering tuition reimbursement.
• Claim tax credits: The American Opportunity Tax Credit (AOTC) can provide up to $2,500 annually. Check IRS guidelines for eligibility.
• Borrow responsibly: If you need student loans, keep total debt manageable (ideally less than your first-year post-graduation salary) and plan for quick repayment.

A personal banker at FNBO can help you set up a savings account to start covering upcoming college expenses.

Get a deep dive with more helpful tips with our blog “How to Pay for College”.

Ready to fund your higher education? Let's explore the key financial aid options that can help.

The Free Application for Federal Student Aid (FAFSA^®) is your first step.

• Federal Student Aid:
  • Grants: Money you don't repay (e.g. Pell Grant)
  • Loans: Money you repay, often on better terms than private loans (e.g., Direct Subsidized, Unsubsidized, PLUS Loans).
  • Work-Study: Part-time jobs to earn money for school.
  • Key: Complete the FAFSA^® early every year.

Other options to consider:

• State & institutional aid: Many states and colleges offer their own programs; FAFSA is often required.
• Private student loans: Use private student loans to cover gaps after federal aid. Compare carefully.
• Scholarships: Free money from various organizations based on merit, need, or other criteria.

While saving for education is important, don’t forget to prioritize retirement, as it has less flexibility later in life.

• Prioritize retirement: Maximize your 401(k) (especially employer match) and IRA contributions. You can't borrow for retirement, unlike education.
• Tax-advantaged retirement accounts: Fully fund your Roth/Traditional IRA and employer plans.
• Allocate "extra" to education: Once retirement is on track, direct additional savings to a high-yield savings account or Certificate of Deposit.
• Last resort: Avoid tapping retirement funds for education, if possible, as it depletes your long-term security.

Financial advisors at FNBO are here to help build a personalized strategy, balancing aspirations of education and retirement with tax-efficient solutions and smart investment choices.

Student loans, like other financial obligations, can significantly influence your credit profile:

• On-time payments strengthen your credit history and demonstrate financial responsibility.
• Missed payments can remain on your credit report for up to seven years, potentially affecting future borrowing abilities.
• Credit monitoring services can help you understand how your student loans affect your overall financial situation.

Financial advisors at FNBO can provide personalized guidance on managing student loans while building strong credit.

Student loan debt is common, but it doesn't have to stick around forever. Here's how to speed up your payoff:

• Refinance your loan: Consider combining multiple student loans into one new private loan. A lower interest rate can save you money and help you pay it off faster. Just know that refinancing federal loans means losing federal benefits.
• Pay more than the minimum: Even a little extra each month makes a big difference. Find extra cash by budgeting smarter, working more, or applying financial windfalls (like a tax refund) directly to your loan.
• Explore forgiveness programs: Depending on your job (like public service or teaching) or circumstances (like disability), you might qualify for federal or state loan forgiveness. Check programs like Public Service Loan Forgiveness or Teacher Loan Forgiveness.
• Claim the interest deduction: You can often deduct up to $2,500 of the interest you pay on your student loans from your taxes. This can increase your tax refund, which you can then put toward your loan.

• Traditional savings account: Simple and easy to access. Choose an account with low fees and a good interest rate. Set up automatic transfers for consistent saving.
• 529 college savings plan: A state-sponsored investment plan offering tax-free growth and withdrawals for qualified education expenses (tuition, books, room & board). There are no annual contribution limits, but generous gift tax exclusions apply ($18,000/year per beneficiary, $36,000 for married couples in 2024). You can even roll up to $35,000 into a Roth IRA later!
• Roth IRA: While primarily for retirement, contributions can be withdrawn tax-free and penalty-free for qualified education expenses. It grows tax-free, but has annual contribution limits ($7,000 in 2024, $8,000 for 50+).
• Coverdell education savings account (ESA): Like a 529, this account offers tax-free growth for education expenses. However, annual contributions are limited to $2,000, and income restrictions apply.

Ready to start saving? A Personal Banker at FNBO can help you get started today!

Leverage tax-advantaged accounts designed for education:

• 529 education savings plans: State-sponsored plans offering tax-free growth and withdrawals for qualified education expenses (K-12 & college). Flexible and popular.
• Coverdell education savings accounts (ESAs): Similar tax benefits for K-12 through college, with lower contribution limits and income restrictions.
• Custodial Accounts (UGMA/UTMA): Flexible funds for the child, but assets become theirs at maturity.
• High-Yield Savings Accounts: While they don't offer the same tax advantages as 529s or Coverdell ESAs, a high-yield savings account is a simple, flexible option for short-term savings or for funds you might need sooner. You can withdraw money at any time without penalty, making it suitable for immediate education-related needs.