September 18, 2025
Education can be one of the most meaningful investments you or your family will ever make, but it can also be one of the largest expenses. Whether you’re preparing for your child’s future, exploring career training or managing student loans, a little planning can go a long way toward keeping costs manageable.
Here are some practical tips for saving, borrowing and paying for education.
Tips for Saving
- Use a Cape Cod 5 Financial Calculator – As a place to start, Cape Cod 5 has a range of personal financial calculators on our website, including college and other savings calculators as well as debt and budget calculators that can help you as you are preparing for and paying off student loan debt.
- Consider a 529 Plan – A 529 plan is a tax-advantaged savings vehicle designed to encourage saving for future education costs, and they’re not just for college anymore. Most vocational and trade schools are eligible, as is community college. Even K-12 expenses are eligible up to $10,000 annually. Read more about 529 plans here.
- Think beyond four years – Community colleges and vocational schools are valued alternatives to traditional four-year schools. Many students choose to begin their higher education at community college as they explore their career and education options. Vocational schools often present students with lucrative career opportunities in various trades at far less of a tuition cost.
- Remember to Continue Saving for Retirement – Parents: Aim to place a suitable percentage of your income into your retirement fund, then begin working on your child’s student loan savings and payments. The best thing you can do for your children financially is to be secure in your own retirement.
Tips for Borrowing
If you need to borrow, careful planning can help keep repayment manageable.
- Set borrowing limits: Try to allocate no more than 10% of post-graduate income to student loan repayments. Start by first considering the career and salary expectations for yourself or your child. A good rule of thumb is to project the starting salary and try to borrow no more than that amount. Given that loan repayments are over a 10-year period (thus 10% of one year's salary), this will give you a good rough estimate of where you want to be.
- Apply for financial aid early - Submit the Free Application for Federal Student Aid (FAFSA) as soon as the form is available (typically on October 1 each year). While this application is used to determine federal student aid, many colleges and universities use it to allocate need-based awards. These resources can diminish the longer you wait, so it is important to act early and meet the FAFSA deadlines.
- Understand your loan options:
- Federal loans usually offer more borrower protections, such as flexible repayment options, forgiveness programs or a grace period after graduation before payments start. Some even cover interest while you are in school or pursuing higher education.
- Private loans can sometimes start with lower interest rates, but they often have variable terms, fewer protections and usually require a co-signer. Both variable and fixed-rate options are available, as are loans with payments that start right away and those that don't start until after graduation. Rates and schedules will vary depending on which option works best for your situation. Read more about these two options here.
- Consider the New England Regional Student Program (RSP) – This program enables New England residents to enroll at out-of-state New England public colleges and universities at a discount. Students are eligible for the RSP Tuition Break when they enroll in an approved major or program. Read more about this program here.
Paying Tuition
Ask about an installment plan – Rather than paying tuition in a lump sum, many schools let you spread payments out over the semester or year. These plans often come with little or no interest, though there may be a small setup fee. Be sure to stay current to avoid penalties.
Each education journey is unique, and so is every financial plan. What matters is finding the approach that works for you and your family, whether that's saving a little each month, making careful borrowing choices or taking advantage of tuition plans. The good news: there are many ways to make education affordable without taking on too much debt. For more information, visit: studentaid.gov.
