The 3 Key Steps to Making a College Funding Strategy

Key Takeaways

  • Student debt is at the highest level it’s ever been, so funding for college is an important decision.
  • The three-stop process of planning, monitoring, and selecting a college can help you make a smart decision on how to fund your child’s college.
  • Up front planning and reaching out for help when you need it can help you make those smart decisions.

The number one concern of parents and grandparents for their children is their education. Intrinsically, they worry how their children will handle money, but extrinsically, they are concerned about the cost to get their child through college.

That concern is founded in the current statistics. In 2003, there was $230 billion of outstanding student debt. In 2016, that number rose to $1.3 trillion, a 500% increase. For the 2016-2017 academic year the average cost for private education is $45,370; for public education, it is $26,100.

With these statistics in mind, it’s easy to see why funding for college is an important decision. It’s going to be the biggest debt that a child is going to have, other than perhaps a loan on their home.


College funding can be looked at as a three-step process. The first step is planning. There are five factors when we look at planning:

  1. Public or Private – Determining whether the school will be public or private makes a big difference for funding enough money to pay for it. As the statistics above showed, private colleges can be significantly more expensive than public ones.
  2. Years to fund – How many years do you have to fund for college? This is determined by the age of your child when you start your planning before they begin college.
  3. Scholarships – This is a tough one to plan, especially if you are planning early, but if you are aware of any, factor those in.
  4. Work-Study/Year off – Is your child going to participate in a work-study program that allows them to work part time and still attend college, or will they maybe take a year off prior to entering college to save up some more money?
  5. Loan total – If you can’t fully fund the college education, how much money is the loan?


The second step in funding for college is monitoring. There are three factors to consider when we talk about monitoring:

  1. Money accumulation – How is the money that’s being set aside accumulating, and will that accumulation lead to the goal you set for funding?
  2. Changes to the funding – There could be changes in technology, the cost of education, and other changes in the way we consume education that could make a difference as to how much to fund.
  3. Child’s goals – What does the child want? Do they want to go to a technical school or get an associate’s degree? Maybe they don’t want to go to college at all. Or do they want to go all the way out to the professional level where they have several years of schooling after undergraduate studies.


The final step in the three-step funding process is selecting a college. There are three factors to think about in this step:

  1. Income coming out of college – What will the income be, coming out of that college? Could it be $40,000 a year, or $70,000, or something else? It makes a big difference in what the loan for augmenting the college fund might be, if it’s not fully funded.
  2. College programs – What kinds of scholarships are offered for that college? Do they have a work-study program? Can you take a year off and come back to the program? These are all things that could be important to search for alternative ways to fund college.
  3. Find the schools that fit – Now you can go through and find the schools that fit your funding based on all the above factors, and mesh them with your child’s goals.


This is a very important decision to make, so you want to be smart about it. You have to do a lot of up-front thinking, otherwise you can run in to the problems that a lot of young graduates are facing with high loans that they can’t pay off based on their current incomes.

We can give you some help here. Contact us and we’ll help walk you through the three-step process to make sure you make really great, smart decisions about college funding.

Until next time, enjoy!


Successful families want the next generation to save first and spend second, and we do too! 

Download our free Building Financial Awareness by Gary Klaben and get strategies and resources on teaching children or grandchildren based on how Gary trained his own children. Learn more and download this free resource.

Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country.  He has over 30 years of experience and is the author of Changing the Conversation, The Wealth Sanctuary and co-author of The Business BattlefieldWhether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
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