How Schools Can Help Students Save for College
by Brian Page, Outreach and Education Manager, Budget Challenge
Completing college improves the chances of earning a higher salary while reducing the risk of being unemployed. But, students can no longer assume that any amount of student debt is okay in order to obtain the degree of their dreams. The cost of college has more than doubled over the past couple decades, all while wages have remained relatively flat. Our modern economy now requires a planned approach to paying for a college education.
I spent over ten years teaching personal finance to high school students. In that time, I’ve seen the college matriculation process evolve into a daunting experience for many students, not because they worry about being able to handle college, but because they’re frightened they can’t afford it. Helping prepare students for college takes a commitment from students, parents, schools, government agencies, and educational programs like Budget Challenge.
Students need to approach the college selection process as an investment in themselves. Students can use resources like the Department of Labor’s Occupational Outlook Handbook to get a glimpse of anticipated job growth and income in broad ranging careers. Teachers can work hand in hand with guidance counselors and parents to convince every student to complete the FAFSA. Parents, teachers, and guidance counselors alike can share with students the rule of thumb to not take on more student debt than their anticipated first year’s salary after graduation.
Banks and financial institutions often provide opportunities for students to win scholarships. H&R Block, for example, recently announced another annual commitment to provide $3 million in scholarships and grants to students who excel playing H&R Block Budget Challenge, with registration for fall simulations open until October 1st. This Challenge involves playing an award winning personal finance simulation that requires road-testing money management strategies necessary for the real world; a much needed opportunity for teens as they transition into an adult world where they will eventually pay by the mistake.
To help teens consider broad ranging savings opportunities, introduce them to tools such as the soon to be released Budget Challenge ROI calculator, where they can calculate how long it will take to break even on college costs. The tool includes factors such as current college savings, working part time during college, financial assistance (grants, scholarships, need based aid), and even the cost of living. Engaging in the math behind college savings opportunities may be the nudge they need to develop a creative plan that leads to an affordable college education.