While many people are planning for Christmas, families with college age children are working on college applications and funding. The financial commitment for funding a four-year degree is rivalled only by the commitment to a home down-payment. It is the second largest personal expenditure in a lifetime. And completing the degree will greatly impact a person’s lifetime earning power.

Time flies by, in a whirlwind on activities, from the time the child is borne until the thoughts of college begin. Those who didn’t start the saving for college early still have some options to pursue. Deborah Fox of Fox College Funding LLC has written the book on the subject. The key to late-stage funding is to match the child’s interests and talents with those promoted by the college. That way, not only will there be suitable financial aid and tuition discount options, there might also be ‘Merit Aid’.

According to The US College Board 2010 Trends in Pricing, the average cost per year for a college education at a public school is $19,388. That is per year, so a total for a four-year degree is $77,552. If that number is alarming, consider the private schools. Here the cost is $39,028 per year or $156,112 for a bachelor’s degree. And most students these days to not stop at four years of college education. These numbers are all inclusion, with tuition, fees, books and supplies, room and room, along with a modicum of personal expenses.

When undertaking college planning, it needs to be comprehensive to be able to secure the most resources available. Ms Fox notes there are five categories to consider; academics, career assessments, cash flow, financial aid, and taxes. The latter is only relevant to those who file US income tax returns. The initial steps in the planning process are to assess whether the family or student will qualify for needs-based financial aid, then calculate how much money the family can afford to contribute from their own means. This is the starting point.

There is a gap between those who are eligible for needs-based aid and those families who can fund the college from their own assets. The families in the gap need to work the hardest in late-stage college planning. There is a website ‘college-aid.com’ that offers a list of funding calculators and aid qualifications. In any event, for all families there are options to pursue for reducing out-of pocket costs. There are tuition discounts offered by many colleges.

Private schools offer higher discounts. There are also Merit Aid packages that can provide funds for the full four-years. It is all in the match between the student and the college.

College have profiles for the types of students they are looking to attract. The elements in the profile include the Grade Point Averages (GPA). They screen for the top 20-25% of the pool. For Merit Aid they are looking for a 10.5 GPA or higher. The colleges also consider specific talents for the discounts or merits, such as athletics, musical ability, and the major being pursued be it science, management, or art. By taking a hard look at the college aid requirements, the family can narrow down which colleges make dollars and sense.

Note that the colleges compile statistics on which families are likely to forego aid and pay the full amount anyway. Therefore, it is advantageous to create a competition amongst a few colleges for the admission. It takes some work to identify the options and create a bidding war. But this is time well spent. Remember, the costs for a four-year degree is approaching a $100,000 in the US. And the impact on the student’s lifetime earning power is much greater. So, there are two levels of return on the time and effort invested. The most immediate is the initial reduction in the college cost funded by the family. Then the longer-term benefit is the 10 to 50 times return in their increase in income ability over 30 years of working.

Starting at a community college and then shifting to a four-year institution can go along way in making education affordable. It can also provide the time for the student to determine what major they will pursue. The recent accreditation and recognition of the Bermuda College is a great financial benefit to families with college age children in Bermuda.

Patrice Horner holds an MBA in Finance, a FINRA Series 7 License, and is a Certified Financial Planner (CFP-US). Any opinions expressed in this article are not specific recommendations, nor endorsements of any productions. Individuals should consult with their banker, insurance agent, lawyer, accountant, or a financial planner for advice to address their personal situations.