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College Planning and College Choices: Financial Strategies for Positive Outcomes

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Planning for College Expenses as a Family

As families embark on the college planning journey, a good place to start is with a thorough budgeting process. Families can begin by assessing their financial situation, including income, savings, and potential sources of financial aid. By understanding their financial capacity, families can set realistic expectations and establish a budget. It’s essential to prioritize needs over wants, and it may be necessary to explore cost-effective options such as attending community college for general education courses before transferring to a four-year institution or opting for in-state schools with lower tuition fees.

College expenses can significantly affect a family’s broader financial goals, requiring careful consideration and planning. Families should assess how funding higher education fits within their long-term financial objectives, such as saving for retirement, purchasing a home, or supporting other family members. Parents should transparently discuss the costs associated with a college education to help students grasp the magnitude of these financial commitments. They should emphasize the importance of aligning college expenses with the family’s financial goals to help students appreciate the need for responsible financial planning, including savings strategies and potential sources of financial aid.

Students can assist in researching college options, comparing tuition fees, and exploring scholarship and grant opportunities to help alleviate the financial burden on their families.
Unlike loans, grants and scholarships are free aid, meaning they don’t need to be paid back. In general, grants are given based on financial-need, while scholarships are merit-based and awarded to students based on their academic achievements, extracurricular activities, field of study, and more.1 You can apply for grants at all levels: federal, local and institutional. You also can find grants based on race, gender, sexual orientation, where you live and other factors. Some organizations that offer scholarships also offer grants for need-based recipients.2 Additionally, students can take proactive steps to minimize college expenses by considering factors such as living arrangements, transportation costs, and potential part-time job opportunities.

FAFSA as Part of the Financial Planning Process

Navigating the Free Application for Federal Student Aid (FAFSA®) process is a pivotal step in the college planning journey and can have profound implications for decision-making. FAFSA® offers a comprehensive assessment of a family’s financial situation, determining eligibility for various forms of financial aid, including grants, scholarships, and federal student loans. The insights gleaned from FAFSA® inform families about available financial resources and can influence their choices regarding college affordability and financial planning. By leveraging FAFSA® data effectively, families can optimize their financial aid strategies and alleviate some of the burden of college expenses, paving the way for more favorable outcomes. Recent changes to the FAFSA® process include:

  • The federal deadline to submit the 2024–25 FAFSA® form is June 30, 2025. Some states and colleges have their own deadlines for financial aid. You can check for updates here.3
  • Contributor” is a new term on the 2024–25 FAFSA® form. It refers to anyone asked to provide their information, consent, and approval to have their federal tax information transferred automatically from the IRS into the FAFSA® form. The online FAFSA® form will tell you who needs to be a contributor based on your answers to specific questions. However, being identified as a contributor on the FAFSA® form won’t make that person responsible for paying for your education costs.4
  • You won’t be able to access the FAFSA® form without a account. To start your 2024–25 FAFSA® form, log in to your account. If you don’t have one already, you and your contributors must create your own accounts to access the online FAFSA® form, provide consent and approval, sign, and submit the form.5

Long-Term Implications of Financial Planning for College

While the immediate focus may be on financing tuition and expenses, families must also consider the broader financial ramifications, including loan repayment obligations and investment in future opportunities. With the rising costs of higher education, many students rely on loans to finance their education, often accruing substantial debt. This debt burden can delay major life milestones such as purchasing a home, starting a family, or saving for retirement. High levels of student debt can also restrict career choices, forcing individuals to prioritize higher-paying jobs over pursuing their passions or entering public service sectors. While weighing the pros and cons of assuming college loan debt, keep in mind that typical earnings for bachelor’s degree holders are $36,000 higher (or 84%) higher than those whose highest degree is a high school diploma. College graduates on average make $1.2 million more over their lifetime.6

Which School is Right for YOU?

The application and admissions process can be pivotal in college financial planning. Families should engage in discussions with colleges regarding tuition costs, financial aid offers, and potential scholarship opportunities to ensure alignment with their financial goals. As part of this process, families should assess various financial aid options, including merit-based scholarships, need-based grants, and institutional aid packages, to optimize college affordability. By proactively seeking financial aid opportunities and leveraging available resources, families can reduce the financial burden of college attendance.

When evaluating the fit of a potential college, future students should consider various factors beyond just costs or the prestige of a well-known institution. While a renowned school may offer prestige and networking opportunities, assessing whether the college aligns with the student’s academic, career, and personal goals is essential. Factors such as program offerings, faculty expertise, campus culture, extracurricular activities, and location play crucial roles in determining the overall fit of a college. Students can make informed decisions that lead to a college experience conducive to their academic and personal growth by prioritizing their individual needs, preferences, and long-term aspirations.

Final Thoughts

By incorporating financial considerations into the college evaluation process, families can make an informed decision when selecting the most appropriate institution for their situation. A forward-thinking approach empowers families to navigate college choices with confidence and foresight, laying the groundwork for a secure financial future for both the family and the student. At Treehouse Wealth, we’re here to support you through life’s journeys—including sending your children off to college!


1 Grant, Scholarships & Loans: What’s the Difference?, Drexel University, School of Education
2 Dori Zinn, October 31, 2022, How to Pay for College: 5 Ways to Fund Your Education Now, Forbes
3 FAFSA Application Deadlines, Federal Student Aid
4 7 Key Changes Coming to the 2024–25 FAFSA® Experience, Federal Student Aid
5 Get Ready for Student Loan Payments, Federal Student Aid
6 How does a college degree improve graduates’ employment and earnings potential?,  Association of Public & Land-Grant Universities

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