How to Save for Your Child’s College Tuition

A grandfather and his young grandson both place dollar bills into a glass college savings jar on a white table.

Saving for a big-ticket item like college can seem overwhelming, especially when tuition, fees, room and board cost more than $20,000 on average at public four-year, in-state schools for the 2016-2017 school year. (Don’t look now, but private nonprofit schools tip the scales closer toward $50,000.)

If you get an early start and make smart decisions, planning for your child’s education isn’t as difficult as it might seem. There are things you can do at every stage of parenting to put yourself in the best position possible. Use our Fifth Third Bank College Savings Calculator to estimate what you can save for your kids’ college fund. Here’s the breakdown of what, exactly, parents should do during each stage of their child’s educational development:

If You're a New Parent

Open a 529 Plan. This is a basic step, and one many parents know they ought to take, but only 37% of parents are currently using a 529 account to sock cash away for college, according to Sallie Mae’s most recent How America Saves for College report. That percentage should be much higher, as the money you save in this account grows tax-free as long as you use it for qualified education expenses, and many states award a tax credit or deduction for parents who contribute.

Start Saving Now. The amount of money you must save every month from age zero is a lot less than the amount you must save if you don’t start until your child is 10. Experts recommend starting small and saving approximately $50 to $100 a month as soon as your baby is born. “That’s the time to establish your 529 plan, that’s usually when people are thinking about it,” says Cindy Richey, a certified financial planner in Kansas City, MO. “Once you say, ‘Oh, I’ll do that sometime in the future, the next thing you know, they’re 10 years old.” You can (and should) bump up your contribution level over the years. Try this simple calculator to see how much you’ll accumulate over time, even if you start small.

…But Don’t Put Off Saving for Retirement. No matter how stressed you are about looming college costs, don’t shortchange your retirement savings to put money away. Simply put, if you don’t save enough for retirement, you’ll have to work longer. “There are no scholarships for retirement,” Richey says. “You have to really make it a habit to save for both.”

Ask Relatives for Help. Here’s another reason to get that 529 established early: You can ask your parents or other family members to contribute in lieu of birthday or holiday gifts. In many cases, grandparents want to help, but they don’t always know the best way. “Let the grandparents of the baby know, ‘Hey, we’ve done this,’ and you’ll see money come in,” Richey says.

If Your Child is in Middle School

Don’t Promise Your Child the Moon. “Too often, parents will say, ‘Well, if you get in, we’ll pay for it,’” says Mark Kantrowitz, publisher and vice president of strategy for college search and scholarship site “And that’s a promise they may not be able to keep.” Talk early and often about the idea of a family budget and the fact that you might not be able to afford every college. If you give your children the right information and help them understand how to make good decisions, they'll likely be on the same page.

Encourage Your Child to Start Saving. At this age, kids are old enough to make money on the side via babysitting, mowing lawns or via other odd jobs. Encourage them to set aside a percentage of their earnings toward college and you’ll be helping them create a savings habit that will benefit them for the rest of their lives. Through saving, your kids may also be able to cover a chunk of college costs out of their own pockets instead of taking out loans. “Requiring them to save money toward their own education, rather than just relying on taking out a bunch of loans, is a good solution,” says Howard Pressman, a certified financial planner in Vienna, VA. “The kids now have some skin in the game, and they understand what sacrifices are being made.”

Aim to Cover a Third with Savings. Focusing on the full cost of college can make anyone want to start playing the lottery. As college approaches, make it your goal to cover a third of the cost with savings, a third out of pocket while your child is in school, and a third with loans. That will make the bills coming your way seem a little more bite-size. Once you’ve got a number to focus on, consider Fifth Third’s Goal Setter Savings account, which pays a bonus when you hit your savings goal.

If Your Child is in High School

Rack up the AP classes. If your child does well in them, Advanced Placement (AP) classes can result in credits that allow him or her to skip introductory courses or even fulfill general class requirements in college. That means your child may be able to graduate in fewer than four years—or at the very least finish a degree in four years, which is more unusual than you’d think. That can shave thousands off your total bill.

Have Your Child Apply for Scholarships. Don’t wait until your child is a senior in high school to start applying for scholarships, because there are scholarships you can lock down in younger grades. And keep searching for scholarships after your kid is enrolled in college, as there are many scholarships reserved for non-freshmen. Every dollar you win in scholarships is a dollar less you must borrow.

Consider Starting at a Community College. Spending two years at a community college and later transferring to a four-year school can result in massively lower college costs, but be careful: This won’t work for everyone. According to one study, only one in seven students who started at community college completed a bachelor’s degree within six years. In other words, it can be easy to lose motivation if you lose momentum. Students who are serious about their educational career stand to save thousands, though.

Apply for Financial Aid. Even if you think you won't qualify for financial aid—and you might—fill out a Free Application for Federal Student Aid (FAFSA) every year. Your aid eligibility is contingent on many factors, including the amount your family will contribute to the cost of college and the cost of attendance at your school(s) of choice.

Don't Borrow More Than Your Child Will Make. Not every kid will know exactly what he or she wants to do at age 18, but if yours has an inkling, take a look at that field's starting salary and aim to borrow no more than that, total. “If your total debt at graduation is less than your annual income, you can afford to pay back your student loans in 10 years or less,” Kantrowitz says. “Otherwise, you'll end up in a 20, 25, or even 30-year repayment.”

While saving for college, there are many caveats parents should consider. The bottom line? Start early, take advantage of aid opportunities, and speak with an expert to learn what specific strategies are best for your unique situation.

And if your kids are already in college—or maybe even graduated already—and are looking at how to best tackle those student loans, refinancing can be a great option. CommonBond is a student loan lender that helps give students and graduates simpler, more affordable and more transparent ways to pay for higher education.

Saving for College with Fifth Third Bank

Fifth Third Bank provides support for those saving for a college fund. Gain insights by using our College Investment CalculatorCollege Living Expense Calculator, and learning more about our Student Loans

Fifth Third Bank, National Association, may refer customers to CommonBond. Compensation for such referrals may be paid by CommonBond to Fifth Third Bank if the referral results in new business for CommonBond. The amount of any referral fee paid or received services will not affect the fees paid or payable by you. Loans are subject to credit review and approval.