Written By: Carlie Ransom CFP®, AIF®
College costs are skyrocketing, and those of us in Gen X are caught in a unique financial squeeze. I know firsthand how it feels to juggle mortgage payments, sports leagues, elder caretaking, and retirement planning while also trying to save for my kids’ college. Unlike our parents’ generation, most of us can’t rely on retirement pensions or affordable college tuition, so we need to get creative with college savings plans that won’t compromise our long-term financial health.
And yes, I’m still rooting for that basketball scholarship (Go Swish!) but just in case…
While 529 plans get most of the attention in college savings discussions, they’re certainly not your only option if you’re uncomfortable locking funds into an education-only account or worried about having your kids take on massive student loan debt. As a Certified Financial Planner® Professional who’s worked with hundreds of families, including many families still struggling with their own student loans, I’ve compiled this guide to break down both traditional and unconventional approaches to funding higher education without derailing your retirement.
A Note Before We Begin: This article is meant to educate and inform, not to provide personalized investment or tax advice. Please check our disclaimer page for complete legal information.
In my work with physicians and other professionals carrying significant student debt, I’ve noticed something interesting—while few regret getting their education, many wish they’d planned better for the financial burden. Getting a PhD no longer guarantees that you are financially secure, especially if you live in a more expensive city. Home ownership and retirement savings are significantly delayed for many professionals, adding to their overall stress about their career.
The numbers are staggering—U.S. student loan debt has ballooned to $1.6 trillion, with the average borrower shouldering nearly $38,000 in loans. Even those with solid six-figure incomes can find themselves financially constrained when hefty student loan payments take a bite out of their monthly budget. Rather than defaulting to the traditional “borrow now, worry later” approach, today’s families need a more strategic plan for college funding.
A note on student loan forgiveness: As a recipient of Teacher Loan Forgiveness, I am a fan of loan forgiveness programs, especially for public service. However, with recent changes to the Saving on a Valuable Education (SAVE) loan forgiveness program and other income-driven repayment programs that allow student to qualify for either Public Service Loan Forgiveness (PSLF) or 20-25 year forgiveness, I’m simply not confident that these programs should be 100% relied upon for future borrowers.
1. Dual Enrollment & Free Early College Programs
Why pay for four full years when your teen can knock out college credits while still in high school? Before being a financial planner, I taught college biology in a high school for a dual enrollment program that offered high school and college credit at the same time – for no cost to the student! The best part about many dual enrollment programs is that they are often offered at the high school, so that a busy student doesn’t necessarily need to leave campus to go to a community college. At my former school, students were able to get a full 2-year degree completed while in high school, saving two full years of college tuition.
In Washington State, the Running Start program lets juniors and seniors take college courses at no cost, potentially shaving a year or more off their time at a four-year university. Most states have a similar version of this program. For example, in the fall of 2024, Colorado launched Colorado Promise, where families making under $90,000 qualify for two full years of tuition and fee reimbursement.
If your student isn’t ready for a full two-year college degree while in high school, they can simply take some college classes that count for community college credit, or they can selectively take Advanced Placement (AP) or International Baccalaureate (IB) courses if offered. When deciding on high schools to attend, paying attention to dual enrollment, AP, or IB program options is the key to saving money on the overall cost of college.
2.Employer & Military Benefits: Let Someone Else Pay
One strategy that’s worked well for families with older teens is targeting employers with generous education benefits. You might be surprised by how many companies will contribute to college costs.
Starbucks covers 100% of tuition for an online bachelor’s degree through Arizona State University. Amazon’s Career Choice program kicks in up to $5,250 annually for employees pursuing degrees in high-demand fields. Similar programs exist at Target, Chipotle, and Bank of America, creating pathways for students to earn their degrees without drowning in debt.
For military families, the GI Bill remains one of the most powerful education funding tools available. The Post-9/11 version covers full tuition and fees at public in-state universities, provides a housing stipend, and includes an allowance for books and supplies. What many families don’t realize is that veterans who don’t use their benefits can often transfer them to a spouse or child.
The Yellow Ribbon Program expands GI Bill benefits by covering private college tuition and out-of-state costs at participating schools. This includes prestigious institutions like Stanford, Columbia, and Duke, making top-tier private education surprisingly accessible for military families.
3. Balancing a 529 Plan with Flexible College Savings
When my kids were young, I was hesitant to put too much into their 529 plans given the penalties for non-educational withdrawals. However, the triple tax break offered through 529 plans (when I lived in Colorado) was too tempting to ignore. That’s why I opted for a hybrid approach that maintains flexibility.
Many parents find success pairing a moderate 529 contribution with an UTMA (Uniform Transfers to Minors Act) account, or simply a non-retirement brokerage account. This allows for greater flexibility for expenses beyond education. This way, if your squirmy little nugget goes on a different path besides college, they are still being supported on their launch into adulthood.
Other clients incorporate U.S. Series I or EE bonds into their strategy, which grow tax-free when used for qualified education expenses and provide a conservative complement to stock-heavy 529 investments. This is a great option for more-risk adverse investors who are simply unsure if college is the right choice for their children.
4. Scholarships and Local Grants: The Hidden Gem
Here’s something that many parents miss: While national merit scholarships get all the most attention, local and employer-sponsored grants often have far less competition and can be much easier to secure.
I’ve seen students receive substantial funding from community foundations that offer scholarships based primarily on local residency rather than just academic performance through everything from the local Rotary Club to local churches—you never know where you can find aid if you look around. Some states provide additional opportunities—Washington has the WA Grant program, and Colorado offers the College Opportunity Fund (COF) with aid based on credit hours.
Another source that’s consistently overlooked? Employer scholarships. Companies like Boeing and Microsoft offer scholarships specifically for employees’ children, but these often go untapped simply because families don’t think to check with their workplace. A friend of mine works at Boeing and didn’t realize until her daughter’s senior year that the company offered a $5,000 annual scholarship for employees’ children.
5. Earning While Learning: Work-Study and Paid Internships
Working during college isn’t just about covering costs—it’s also about building valuable career connections and work experience. Federal work-study programs provide campus-based employment that typically accommodates academic schedules.
For students in high-demand fields like engineering, tech, and healthcare, paid internships can substantially reduce reliance on loans while developing career-relevant skills. I’ve watched entrepreneurial students leverage the gig economy through platforms like Upwork or Fiverr to generate income while maintaining academic flexibility.
Working in college can also be fun and easy. I worked the desk of a small fitness center and was essentially paid to just do homework for 20 hours per week, and there are numerous jobs on campus like this for students who need the income. Other jobs I had were fun and recreation-related and didn’t lead directly to a career, but I still cherish the memories and the paycheck was helpful.
Working while young and energetic is fun, a great way to meet people, and also helps the resume while paying for college.
Despite all these alternatives, 529 plans remain among the most tax-efficient vehicles for college savings. For families with a high degree of confidence their children will pursue higher education, and the extra resources to save, the tax advantages can be substantial.
The benefits come in three forms: First, your investments grow tax-free, meaning you’ll never pay federal capital gains taxes on earnings within the account if used for educational expenses. Second, withdrawals for qualified education expenses—including tuition, room and board, books, and even technology—are also tax-free. Third, many states offer income tax deductions for contributions, essentially providing an immediate discount on your college savings. This triple tax break is not common in the finance world.
One game-changing development for college savers is the new rule starting in 2024 that allows leftover 529 funds to be rolled into a Roth IRA for the beneficiary. This addresses one of the biggest concerns parents share with me—”What if my child doesn’t need all the money we’ve saved?”
Now, up to $35,000 (lifetime limit) can be transferred into a Roth IRA for the beneficiary, ensuring that college savings can still benefit your child’s financial future even if their education costs less than anticipated.
Filing the Free Application for Federal Student Aid is crucial, even for families who don’t expect to qualify for need-based aid. Beyond federal assistance, many states and colleges use FAFSA data to determine eligibility for their own grant and scholarship programs.
Don’t overlook this step for possible partial aid or partial scholarships, even if you don’t think your child qualifies for needs-based aid.
Don’t overlook potential tax breaks when paying for college. The American Opportunity Tax Credit (AOTC) can knock up to $2,500 per year off your tax bill for each eligible student during their first four years of college. For part-time students or those returning to school later in life, the Lifetime Learning Credit offers additional tax relief.
As a Gen X mom who’s balancing college savings with my own retirement planning, I understand the pressure to do right by our kids while ensuring we don’t become a financial burden to them later. Between basketball and lacrosse tournament fees, band, Jiu Jitsu, and the mortgage, finding extra money for college can be a stretch.
But I’ve seen countless families successfully navigate this balancing act through strategic combinations of 529 plans, alternative savings vehicles, employer benefits, and early college credits. The key is approaching college funding as part of your broader financial picture, not as an isolated goal that trumps all others.
It’s also completely fine to have your student take on the majority of the funding. If this is the approach, you can use this as a financial planning conversation about money to teach them about trade-offs on if it makes sense to take on student loans vs. working vs. shooting for scholarships. Keep your child at the center of the conversation and empower them to make decisions around the amount of debt they take on. Help them understand interest rates. Help them understand options.
By making thoughtful decisions now, you can help your child graduate with minimal debt while keeping your own financial future on solid ground. Because if there’s one thing I’ve learned from working with those physicians still paying off loans in their 40’s or 50s, it’s that education debt can cast a long shadow—but with proper planning, your family can enjoy the benefits of higher education without the lasting financial strain.
If you’d like to discuss your strategy, please reach out for a free initial consultation.
