Saving for College at the Last Minute

Create a New Roth IRA

Use your own income to start a student-funded Roth IRA. You can contribute to it (parents can as well), and contributions are limited to $5,500 or the amount you earned this year - whichever is less. No taxes are due if your earnings are less than the standard deduction of $6,300 (though this number may change). The money from your Roth IRA can be used to pay for your education, for books, for boarding or for anything else you need for college. There aren't restrictions on it, and it doesn't count as an asset - so the amount you save in your Roth IRA doesn't count against your financial aid eligibility.

Apply for Scholarships

The average four-year private university costs $47,000 including tuition, room and board, according to the College Board. Public four year colleges cost an average of $25,600 annually plus $11,000 for room and board. Public two year colleges cost an average of $21,000 plus $12,000 in room and board. But scholarships and grants can pay for a huge chunk of that cost. Some are based on merit (are you gifted in music? Are you a top athlete?) while others are based on different factors: Whether you're the first to go to college in your family, your ethnicity, military affiliation, physical disability, etc. There are plenty of scholarship opportunities available if you spend the time looking for them.

Get a 529 Savings Plan

This provides significant tax savings, as these are exempt from federal taxes. Any US citizen or resident alien who is 18 or older can open a 529 plan. So while parents of soon-to-be college students are typically the ones who open those plans, an adult can open a 529 to pay for his or her own education. According to a 2018 study from Sallie Mae, a student lender, only 27 percent of families are using 529 savings plans, making them an under-utilized but useful tool for funding your education.

Choose the Best 529 Savings Plan for Your Needs

The good news: You can build a large 529 fund quickly. The most important part is choosing the best 529 plan for your needs. Most states offer at least one 529 plan, and you don't need to invest in the plan that's offered in the state you live in. So choose the plan based on the investment options and fee structure. The two types are prepaid and college savings. If you go with a prepaid plan, you're locking in the current cost of tuition - but if you plan on starting college in a year or so, this may not be your best option. The other type of 529 is the college saving investment plan. Typically, your money would be invested in exchange-traded funds or in mutual funds (each plan has different fund options). There's an age-based option, which adjusts your fund mix so it's less risky the closer you are to starting college - and there's a static choice, which stays steady over time.

Understand Your Risk Tolerance Level

You should also consider your risk tolerance when choosing your investments. Pro tip: If you didn't start saving until 4 years prior to beginning college, you would need to invest $4,200 monthly in your 529 savings plan with a 6 percent rate of return to completely pay for college by the time you begin. If you plan on investing in that program through college, you'd need to invest $2,350 monthly. You can withdraw the money when you need to take out the money tax-free to cover education expenses, which can include books, computers or anything education-related.

Contribute Extra to Your 529 Plan

The maximum you can contribute to your plan is $15,000 annually. But you can front-load your contribution with up to 5 years of contributions in the first year. This will give you 5 years of extra tax-free growth immediately. So if you have some extra funds, pop them into your 529 immediately.

Get Rewarded for Shopping

Make sure you enroll in all the rewards programs available. For example, Upromise is a free program that rewards prospective students and parents for shopping. They deposit a portion of what you spend into a designated college account. You can also send invitations to friends who can register their credit cards with this service, so you can receive deposits whenever they shop as well. Bonus: Grab an Upromise Mastercard, and the cashback you earn will go directly into your Upromise account. Connect this account with your 529 (if you have one), and you'll receive a bonus.

Don't Plan on Spending a Dime on Your Textbooks

Textbook costs can add up quickly, with the average full-time undergrad at a four-year school spending $1,240 on books annually, according to a recent study by the College Board. But BookBoon is totally free for the first 30 days, and then it's $6/month, and it offers more than 1,000 eTextbooks on every subject, from math to sociology. Need more books? Rent a digital version of the book you need for a relatively low fee. Amazon has a textbook store, as does Chegg.com and Google Play. These are slightly more expensive than BookBoon: For example, one algorithm book on Google Play is a $28 rental - but it's still significantly less expensive than purchasing the $80 e-book.

Don't Worry About Your Savings Versus Your Financial Aid

If you're hesitant to save money because you may be penalized for your savings when you apply for financial aid, you can put that worry aside. The federal government uses salary as the deciding factor in determining aid (they do look at savings, but it's not as important). They only use your assets (not including retirement or your house) as 5.64 percent of the equation when considering your financial aid package. A parent with $100,000 in savings would only be expected to pay $3,000 more for college (as considered by FAFSA) than someone with no savings. You can also move your money around: If money is saved in the name of the prospective student, it may cost you four times as much in financial aid as opposed to money in a savings account in a parent's name.

Choose Between Saving and Paying Off Debt

Sometimes, saving money isn't the best move. If you have high interest debt, such as credit card debt with 14 percent APR, you should focus on paying down this debt before paying for college. You can take out another loan for college that has a lower interest rate than the other debt you're currently incurring, which will save you money in the long run.