You aren’t alone if you haven’t saved anything yet. A full 36 percent of middle-class parents and 29 percent of low-income parents have not put aside money for college. But it’s still not too late to turn things around.
According to the Department of Education, the average annual cost of tuition, fees, and room and board was $18,632 at four-year public institutions and $37,990 at four-year private institutions in 2014-2015. So it’s no surprise that about two-thirds of college students end up taking on debt to pay the bills.

Here are some concrete steps you can take — starting when your teen is in high school — to prepare for a successful and more affordable college launch.

  1. Start a 529 college savings plan — quick!

    This is your best vehicle for tax-sheltered savings because you don’t have to pay taxes on what the account earns as long as the money goes to education. Different states have different plans, so it’s worth comparison-shopping at to pick the plan that sounds like the best fit for your family. Afraid that you’ll over-save and mess up your child’s financial aid package down the road? No worries there. For your child to qualify for financial aid, you only have to use 5.64 percent of your 529 balances each year to pay for college expenses. Afraid that you won’t be able to save very much? Just save what you comfortably can — with compounding and interest, it really can add up faster than you might think.

  2. Create a savings goal.

    Use an online college savings calculator to play with the numbers and come up with a realistic savings goal. “Chances are you’ll be appalled by how big the number is, but it shouldn’t dissuade you from saving,” says financial expert Beth Kobliner, author of Make Your Kid a Money Genius.

  3. Put the account in your name.

    True, the money is for your child’s education, but Kobliner suggests putting the account in your name because when you apply for financial aid, the federal formula expects your child to contribute 20 percent of her savings to college, while parents are only expected to contribute 5.6 percent.

  4. Set up automatic deposits.

    Every payday or every month, make the transfer to your child’s college savings account automatic. Research shows that setting up an automatic transfer from your paycheck to your savings plan is a far more effective savings strategy than attempting to do it on your own. If your employer doesn’t offer an automatic payroll deduction for 529 plans, consider setting up a monthly transfer from your own account.

  5. Get grandparents on board.

    If your child is fortunate enough to have grandparents with savings and a desire to contribute, suggest they contribute to your teen’s 529 plan. Some 529 plans even provide gift-certificate forms that you can send to family members to encourage them to make contributions to your child’s plan. Grandparents can set up their own 529 for your kids, but Kobliner doesn’t recommend it. The advantage of a separate grandparent 529 plan is that those assets don’t count toward financial aid calculations until they are used. The disadvantage is that when the funds are used they are considered income for your child, and the federal formula expects the student to contribute 50 percent of her income toward college, instead of 5.6 percent if it’s savings in your name.

  6. Have a down-to-earth talk about college.

    Now is also the time to have more concrete discussions with your child about your family’s capacity to pay for college. Discuss your family’s values around paying for college. Are you willing to do whatever it takes (including taking on massive debt) to pay for your child to attend the school of her dreams? Make sure your child knows that you need to talk care of yourselves, too, both for your own good and to avoid burdening your child down the road.

  7. Identify scholarship programs.

    Unfortunately, the “free ride” is very rare. In fact, only 0.3 percent of college students actually receive enough aid to fully fund their college degree. But kids can start applying for — and getting — college scholarships starting as early as elementary school, and those can add up over time. The College Board searchable database lists more than $6 billion in scholarships, financial aid, and internships from more than 2,200 programs. Low-income families can search for schools on Scholarmatchr, a searchable database of about 300 schools that offer resources and support for low-income students and first-generation college students. Also, check out our curated list of scholarships your teen should consider applying to.

  8. Focus on the real (net) cost of college to you and your child.

    This is the total cost of tuition, fees, room and board, minus any aid you are likely to be offered that doesn’t have to be paid back. The sticker price is usually higher than what you’ll actually have to pay. Use the Net Price Calculator, created by the U.S. Department of Education, to look up schools your teen may be interested in to figure out what the real (net) cost of attending that college will be for your child. If your budding scholar decides to enroll in an online college for the first year, look for an accredited online school with affordable tuition — the costs vary widely.

  9. Understand your Estimated Family Contribution (EFC).

    This is the amount a college will expect you to pay, based on your family assets, income, kids in college, and other factors. In 10 to 15 minutes, you can use an online tool to calculate what your EFC might be. If it’s too high, you may want to encourage your teen to target schools that are likely to offer them merit-based scholarships or that don’t calculate EFCs. If you’re short on savings, you may want to prioritize schools that provide generous financial aid packages.

  10. Have your budding scholar put some skin in the game.

    By the time your child is 16, they should be ready to get a part-time job to contribute to their college savings account. Research shows that kids who chip in for college score higher GPAs than kids whose parents foot the whole bill, says Kobliner. She suggests this may be because when they feel they have “skin in the game” they are motivated to make the most of their college experience. But don’t overdo it. Kobliner recommends trying to limit high school work schedules to 15 hours per week, preferably on the weekends, to leave time for studying and other activities.

  11. Check out supplementary accounts.

    One way to save a bit more is through Upromise. This program will deposit a small percentage of your expenditures at hundreds of retailers into a college account for your child. You can invite family members to register their credit cards with Upromise to earn even more rewards. “These types of programs won’t end up funding your college,” says Kobliner, “but as long as they aren’t charging big fees, they can’t hurt.” Read 7 insider tips on paying for college.

  12. Set up a crowdfunding campaign.

    Let all your friends and relatives know about it. Motivated high school students with a compelling story to tell can raise thousands of dollars through online campaigns.

  13. Plan to apply for financial aid.

    Many middle-class parents assume their children won’t be eligible for financial aid because their income is too high. In fact, about 80 percent of families receive some kind of financial aid (which may include grants, federal work-study programs, and federal loans). A surprising 70 percent of students at private nonprofit colleges whose parents earn between $150,000 and $250,000 were still able to receive grants, according to Kobliner. So unless you are uber-wealthy, it makes sense to apply for financial aid.

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