Conduct a Back-to-School Checkup for College Savings

For early high school students and their parents, planning how to pay for college is a combination of preparing the student to be a great scholarship candidate while also socking away as much college savings as possible.

As students enter their first year of high school, Ginna Woessner, the only high school counselor in Michigan's Glen Lake Community School, starts counseling families on how to plan to maximize the students' talents for maximum scholarship potential.

The process involves a frank discussion of what families can pay and an analysis of a student's skills and attributes that have scholarship potential, along with an evaluation of the educational costs of fulfilling a student's career goals. Experts say parents should take the following steps to prepare their children for the cost of college.

[Find out how college savings can affect financial aid.]

1. Encourage students to develop skills with scholarship potential: As the school year starts, parents with children in middle and high schools should encourage their kids to get involved in activities that allow them to pursue their passions, which can help boost a student's scholarship potential, Woessner says.

A student could get a scholarship for athletics, music or volunteering. Grades may play a part, too. Clare Levison, author of "Frugal Isn't Cheap," recommends parents offer contributions to a 529 plan, tax-advantaged college investment accounts, based on their achievements as an incentive to do well.

For instance, if a child scores high enough on an Advanced Placement test to earn college credit, a parent might contribute $50 to $300 to the child's account. The exact amount should be based on a family's individual financial circumstances, experts say.

[Learn how to evaluate your college savings performance.]

2. Look for attributes with scholarship potential: College savings go further if families find scholarships to supplement what they save. A student's attributes can earn them scholarship cash. Michigan, for example, has scholarship opportunities for Native American students, grandchildren of World War II veterans and Medicaid-eligible students, Woessner says.

If students meet the eligibility standards for the Medicaid-eligible scholarship, they'll have their first two years of community college tuition and fees covered, she says.

Any college savings that families who qualify have can be used to finish the student's education at a four-year college, she says. A page of is dedicated to scholarships and grants provided by the state, opportunities as varied as scholarships for high school students taking college courses and a tuition grant for children of fallen police officers and firefighters.

Woessner recommends families review their state's website for scholarships offered. While college choices can't be completely determined by potential scholarships, families can think about how they'll fill savings gaps with scholarships.

[Get scholarship insight and tips from The Scholarship Coach.]

3. Discuss parent contributions: It's never too early for parents to have an honest discussion with their children about what they've saved, how much they'll continue to contribute to a 529 plan and how much they'll give their children during college, Levison says.

Following the discussion, parents could encourage the student to work part-time to help save for college or take more AP courses to reduce the time it would take to get a degree, and discuss the possibility of living at home during college.

When possible, parents should include school counselors in on the discussion.

For instance, Woessner advises families who can't afford to pay for all four years at a four-year college to consider sending their teen to a community college first. Since community colleges can cost a third of what public four-year universities cost for in-state students in Michigan, a parent who saved for two years of university tuition might be able to cover two years of community college tuition and a year tuition at a four-year institution, she says.

4. Evaluate the educational costs of career goals: Visit with high school counselors in the beginning of a student's freshman year to start thinking about college options, she says. Counselors can help assess children's academic and career goals to determine which schools are a good match.

Woessner weighs career goals heavily, especially in regard to filling in savings and scholarship gaps with student loans.

"If a student wants to pursue a career in social work, I'm not going to encourage attending a college where they'll leave with a lot of debt," she says. However, a strong candidate for an engineering degree can afford to borrow a little bit more based on future earning potential in the field.

Paying for college involves a balance of free money, including scholarships and grants, family savings and student loans, Levison says. To acquire more of the first two and avoid the latter, don't wait until a student's senior year to plan college funding, she says.

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.