TODAY   |  August 12, 2013

How to save, plan for college

If you have a newborn, you’ll need to start saving nearly $500 a month to pay for a public university tuition. Students Natalie Merola and Lindsey Mayfield, mom Julie Mayfield and Say Yes to Education’s Jacques Steinberg share tips on how to handle the costs.

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This content comes from Closed Captioning that was broadcast along with this program.

>> opener from olay.

>>> if you're a parent you probably had this thought at one time or another. how am i ever going to pay for college ? it's a good question considering the average cost of tuition fees , room and board for one year at a public four year school is $17,860. for a private school the price jumps to $39,518.

>> if that wasn't enough, heres more sticker shock for you. at 6% inflation, parent of a newborn need to put aside $463 a month for the next 18 years to cover the cost of a public college and here's what it is for private college , $1,024 a month.

>> here to serve up reality are two current college students. she's a senior at florida international in miami and julie mayfield is lindsey 's mother who blogs about family finances.

>> with us is senior vice president for say yes to education. good morning to all of you.

>> good morning guys.

>> hey there. natalie, let's start with your personal situation first. you're going to fiu and in your senior year. you'll pay $16,255 for tuition, books and transportation. you plan to pay for that. you got financial aid , about $9,000. you did get $7,500 in school loans as well that you're taking out but you feel like the cost of college is under control this year.

>> based on my financial aid package from florida international university i feel confident i can go into my senior year almost debt free.

>> you did take two years off, is that right.

>> yeah.

>> to think things over for a bit and at that point and time your cost of college , you had $63,000 in student loans already, right? just for your first year.

>> my first two years.

>> as a first generation college student in my family, i had no guidance. so i had to rely on like scholarships and grants. however, loan hearss had to make up the difference for me.

>> go back to your freshman year as you're entering college . what would you have done differently knowing what you know now.

>> i would research schools like fiu and see that with a complete package to pay the funding i wouldn't have any college debt.

>> let's move on to lindsey who is a senior at kansas. and your mother julie as well. let's go through some of the numbers. julie , you and your husband paid $44,542 in cash. lindsey paid $15,000 with scholarships she earned. lindsey worked to pay $11,000 for her personal expenses. that adds up to 70,504. the goal here was to go to college and pay for it without debt. have you been able to do that?

>> we have. through a lot of different avenues we have been able to do that and through my process we were very communicative as a family about finances which helps a lot and my parents made it clear to me that i had a couple of things to cover including being diligent about scholarships. a lot of students don't consider scholarships. there's something out there for everyone and after that it becomes a matter of keeping up the academic standards. you can keep your renewable scholarships and saving money even when in high school helps.

>> nice to have a daughter willing to check in.

>> wonderful.

>> you raised her well. will you graduate without any debt for the most part.

>> we are. we were able to pay for it as we went along. i'll be able to graduate with now debt.

>> let's talk about the lessons from these scenarios. a lot of students are facing thousands of dollars of debt but it's the only way they know they'll get an education. is it worth the debt in order to get that degree?

>> i mean, there are certainly studies that show it's worth the bachelor's degree. that can be the difference. i love the word she used as communicative. this is the first time as a parent you're going to share with your child what you make for a living. how much you save. how much is available for college and what an appropriate time to do that as they're transitioning to adulthood and by having that conversation you can work backwards and fit the education to what you can swing.

>> you thought it was worth it or you wouldn't have gone through this.

>> how important was it to figure out a way that your daughter could get a four year degree.

>> it was pornimportant that she be able to go to college and do it debt free. we wanted her to be able to start a business or live in a high cost of living city or go to grad school . we wanted her to do any of those things.

>> and quickly to wrap it up, lindsey got sclips holarships on her own. that's an avenue -- there's so many different scholarships. you have to be your own guidance counselor . huge cut backs on guidance counselors in this country. two websites are great ways to get your feet wet learning about financial aid and scholarships available.

>> community college is a great option for people.

>> start for two years of community college and then switch to a school that will accept your credits.