This law either eliminated or reduced many of the legitimate tax breaks that parents were using to save for a college education. In addition, the 1986 Higher Education Amendments reduced assistance available in grants, and they placed restrictions on financial aid, requiring students to pay a larger portion of the total college bill. In this article we will discuss steps to financial planning for a college education, including estimating college costs, evaluating savings programs, and analyzing sources for financial aid. The first step in financial planning for a college education is to estimate realistically how much college costs will be. Direct college costs include tuition, fees, room and board.
Information concerning direct costs is available from each particular institution.
Additionally, publications are available that provide information about college expenses. The College Cost Book, published by The College Board, provides information on college costs and on how to apply for financial aid. Both of the above references can also usually be found at the local library. Indirect college costs include other necessary educational expenses, such as books and supplies, transportation, medical coverage, clothing, recreation, and other personal expenses. These indirect costs vary considerably among students, and are, therefore, more difficult to estimate than direct college costs.