How Parents are Saving for College Today
Congratulations, parents – you’re very responsible.
I’m not referring to you specifically… I’m talking about some recent survey results published by Sallie Mae.
Turns out, as the economy started to nosedive in 2008 and ’09, college savings… increased. Over half of parents either held their savings rate steady, or upped it.
It’s not as counterintuitive as it first appears…
With the economy going south, education is more important than ever. A number of unemployed have given up looking for work, and gone back to school. A number of parents, worried about their own jobs, are squirreling away as much as possible while they can.
And, nearly universally, college savings is one of the top three savings priorities for parents of children under 18. It’s often number one, or just behind saving for retirement.
Thats the good news. The bad news is only 62% of parents of college-bound children are saving at all.
Yet a much higher percentage wants to see their children go on to higher education. That gap is a problem.
Another problem: most parents aren’t doing everything they can to smartly save for college. For instance, did you know there’s an organization (Upromise) that will give you rewards towards college for making purchases, just like your reward credit cards?
The 529 Plan: a Sticky Widget
529s are a very misunderstood college savings vehicle. Most parents don’t use them at all — and that’s a mistake. Those who do use them tend to use them almost exclusively. That, too, is a mistake. After all, if you had a child entering college in 2009 and all your college savings were in the stock market, you were in big trouble.
The simple fact of the matter is: Saving for college is a tricky thing. You need a good balance between a number of different plans – some to accelerate growth of your capital, some to provide a solid backbone in difficult economic conditions.
You also need to adjust your monies as college gets closer. Just as your 401(k) becomes more conservative as you approach retirement, so must your college savings as your child nears 18.
All of these are major issues that can greatly affect your child’s college dreams.
If you misplay this, finances may decide what college your child attends, instead of merit.
No one wants that.
To help make sure you don’t come up short when the time comes, we’ve put together a number of free reports on how to save for college.
We want to get this information to as many parents as possible. And we don’t want to see you throw your money away. Are you aware of the abysmal graduation rate in America’s universities? Some — like the University of Massachusetts, Boston – are graduating only 33% of incoming students within six years.
That’s unacceptable. And, while the schools carry a lot of the blame — part of the problem is poor school selection at the outset.
If your child is attending the wrong college, the chances of a dropout increase exponentially.
Take a read of this article on how to pick the right college, before the application process even begins.
Combine good school selection with healthy ways to save for college — and savvy use of the best aid packages available – and you’ll have done a lot to prepare your child for a bright future.
Related Articles:
Is This The Best Way To Save For College?
5 Ways To Save On Your Child’s College Education
How To Keep College Costs As Low As Possible
