Saving for College

Building Your Montana College Savings

Planning ahead can take the stress off of paying for college. Learn how you can create a personalized savings plan for your or your child’s education.

1. Do Your Research

The first step to create a college savings plan is to find and compare the cost of attendance at different MUS colleges. Remember that prices vary greatly between 2-year and 4-year colleges, but both types provide high quality education. Be sure you understand the difference between the types of colleges so you can decide what option works best for your future goals, lifestyle, and financial situation.

2. Estimate Your Expected Family Contribution

Your Expected Family Contribution, EFC, is a number used by college financial aid staff to determine how much financial aid you might receive at a given school. Your family’s financial information — including income, assets, and benefits — is used to calculate this number. This number represents the amount of money your family can be expected to contribute towards your college education. 

Knowing your EFC can help you estimate how much financial aid you are likely to receive, which can inform how much money you should plan to save. Use online tools to calculate expected financial aid or learn more about how financial aid is calculated. 

3. Use This Information To Set SMART Goals

Now that you know the cost of attendance of your colleges of interest and your Expected Family Contribution, you can work backwards to determine how much money you should be putting aside every year, month, or week leading up to your first tuition bill. Goal setting is most effective when you are setting SMART goals — this means Specific, Measurable, Achievable, Relevant, and Time-Bound. Use these guidelines to ensure that your goals are realistic and easy to follow through with.

4. Start Saving Soon and Make It a Habit

When it comes to saving for college, time can be your greatest advantage. The more time you have to save, the more time there is for your savings to grow. Don’t forget that every penny counts. Even if all you can save is $10 or $25 a month, saving something is always better than saving nothing. These small sums will add up before you know it. Setting up an automatic transfer from your checking account to a savings account or your college savings plan is a great way to ensure that you are putting aside money regularly.

5. Open a 529 College Savings Plan

Montana parents looking jumpstart their child’s college savings can open a 529 College Savings Plan. The earnings in a 529 plan are tax deferred, and distributions are tax free if used to pay for qualified higher education expenses, including your child’s tuition, fees, books, and certain room and board costs. As the parent, you control the 529 plan account, not your child. The money saved in a 529 plan will have very little impact on your child’s eligibility for need-based financial aid. Learn more about the features and benefits of a 529 plan.

6. Consider All Forms of Financial Aid

There are several forms of financial aid, all with different responsibilities and requirements. First, check to see if you are eligible for any tuition waivers, and compile a list of scholarships and grants that you are eligible to apply for. These forms of financial aid award money that can be used towards your tuition and do not need to be paid back. 

Next, consider if taking out loans is a good option for you. This is borrowed money you can put towards your education expenses and pay back later. If you are eligible, be sure to consider work study. Work study is a program that allows you to get paid for part-time work on- or off-campus, up to the awarded amount. Pursuing any or all of these financial aid options can significantly lower the cost of your education.

Get In Touch with Financial Aid

Have questions about paying for college or how you can start saving? Find the contact information for the financial aid office at each MUS campus.