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 savingsincreased. 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.

Until next time,

Scott Weingold
Publisher, CollegeMadeSimple.com

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

The College Savings Crisis

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.