Make College Affordable with Savings and a Plan
In our previous packet, we looked at the ways millennials have been shaped by and are in turn shaping our nation’s economy, which has impacted the ways they need to save. On reviewing the 9th edition of Sallie Mae’s “How America Pays for College,” we couldn’t help but to see the incredible paradigm shift that the millennial experience has inspired in the next generation of college students and how integral even a small savings can be.
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5 ways to make college more affordable
The value of a college degree isn’t what it used to be, but its importance certainly hasn’t diminished. In fact, in Sallie Mae’s report, “How America Pays for College,” 90% of families expect their student to earn at least a bachelor’s degree, with 54% expecting a graduate degree. Of course, if you’ve read any recent news about the financial details of college education, you’ll know that it’s also a foreboding prospect: there is nearly $1.3 trillion in total U.S. student loan debt, ongoing wage stagnation, and the prospect of enduring years of underemployment.
But it’s not all bad news. A notable paradigm shift is taking place: this year, a whopping 98% of current students are actively engaging in ways to make their education more affordable.
So how does a student and their family better prepare themselves? Here’s our list of the top five ways families can make college more affordable:
1. Save early and save often.
Recent research has shown a link between savings and college success: kids from low- and moderate-income (LMI) households with college savings between $1 and $499 are 3x more likely to attend college and 4x more likely to graduate.
2. Have a plan.
Only two in five of Sallie Mae’s respondent families created a plan to pay for college, but they were able to save 3.5 times more and borrow one-third less than non-planners. America Saves can help you make a plan to save for an education. Pledge to save and you will receive monthly reminders to save and specific advice to help you save more and pay less for college.
3. Be realistic in assessing college options.
Academic programs and financial details often take a back seat to personal choices, but considerations like in-state vs. out-of-state, scholarship opportunities, and work-study programs can mean the difference between college being affordable, or not. An honest assessment of a school’s programs and financial opportunities could knock a personal “want” off the list entirely.
4. Curb spending wherever and whenever possible.
Did you know that the average price of a new textbook has increased by nearly 30% since 2009? Whether you’re looking at room and board, books and supplies, or personal spending, there’s always a way to lower costs. Many students are choosing to live at home to reduce housing costs, while others opt for a track to get their degrees completed faster.
5. Leave no financial stone unturned.
“Free money” is available in the form of scholarships and grants. There are a range of scholarships related to demographics and to characteristics like academic, athletic, and artistic. Find out more at your guidance counselor’s office or online. And by completing the FAFSA, you’ll receive information about any grants you or your child qualifies for.
Don’t know where to start saving? It’s never too late!
- Get familiar with Children’s Savings Accounts (CSAs) and the benefits for kids in LMI households.
- 529 Savings Plans are getting some clearer spending guidelines that may boost their already tax-friendly savings benefits.
- ABLE accounts, tax-advantaged savings accounts for individuals with disabilities and their families, are rolling out this year and may include costs like education and housing for your student.
Tammy G. Bruzon works for America Saves, managed by the nonprofit Consumer Federation of America (CFA), which seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at AmericaSaves.org.
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#SavingsTipTuesday
Advance in field w/o massive bill, layer certifications: http://bit.ly/1L8pcy7 #SavingsTipTuesday @AmericaSaves
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Work part-time to pay for other college costs like books >> http://bit.ly/2apBP9G #SavingsTipTuesday @AmericaSaves Tweet this now
Do your research! Not all college #savings accounts are created equal. >> http://bit.ly/2a5fstU #SavingsTipTuesday @AmericaSaves #529s Tweet this now
Say "no thanks" to toys & clothes; ask for a gift to baby’s #college fund instead! >> http://bit.ly/2a3OsXq #SavingsTipTuesday @AmericaSaves Tweet this now
Know your estimated repayment plan ahead of time. Definitely before graduation! >> http://bit.ly/29UxVb2 #SavingsTipTuesday @AmericaSaves Tweet this now
#SavingsFactFriday
Landing your dream job may take time, prepare for patience: http://bit.ly/29UxVb2 #SavingsFactFriday @AmericaSaves Tweet this now
Families who plan for college save 3.5x more >> http://bit.ly/1Mmh64Y #SavingsFactFriday @SallieMae @AmericaSaves Tweet this now
3 out of 4 students leave school w/ some #studentloan debt. >> http://bit.ly/2apC9FI #SavingsFactFriday #BetterMoneyHabits @AmericaSaves Tweet this now
#DidYouKnow: Approx. 2/3 of college students receive grants. >> http://bit.ly/2ar6re7 #SavingsFactFriday #BetterMoneyHabits @AmericaSaves Tweet this now
A 529 account can be opened as early as birth >> http://bit.ly/1J65SiE #SavingsFactFriday @AmericaSaves Tweet this now
Additional Posts
Do you have a tip about saving for college? Share it w @AmericaSaves & you could win $25 http://bit.ly/28O0Zgc Tweet this now
Estimate the $$$ of your child's college >> http://bit.ly/2a7tvuZ @BofA_Tips v/ @AmericaSaves #BetterMoneyHabits Tweet this now
Let @AmericaSaves help you stay committed to your education #savings plan! Take the pledge today: http://bit.ly/1NWMTGG Tweet this now
LMI kids w/$1-499 in #savings are 3x more likely to attend college & 4x to graduate >> http://bit.ly/2a6YqoU @CFED @AmericaSaves Tweet this now
Never pay to file your financial aid application. Access the FAFSA here >> http://bit.ly/2a7lxC2 from @FAFSA v/ @AmericaSaves Tweet this now
Confused about options to pay for college? @CFPB tools/resources can help you make smart decisions: http://bit.ly/2a7sdAd v/ @AmericaSaves Tweet this now
Learn all about the smart, tax-advantaged ways to save for college from @FINRAFoundation >> http://bit.ly/2ao7NUf v/ @AmericaSaves Tweet this now
Saving for your education? Make @AmericaSaves resources your first stop >> http://bit.ly/2a7uiMu Tweet this now
Here's what you should know BEFORE taking out a #studentloan >> http://bit.ly/2a7tNSB by @CFPB v/ @AmericaSaves Tweet this now
Saving for College, or Not! What I Wish I Knew Then >> http://bit.ly/2a7uknF v/ @AmericaSaves #studentloans #studentdebt Tweet this now
America Saves Twitter Chat
Please join @AmericaSaves on Monday, August 15 at 2pm Eastern for an hour-long discussion on saving and paying for college.
Student loan debt in America has grown to over $1 trillion. With more and more young people planning on attending college at higher and higher prices, education and debt are quickly becoming national priorities. Please join our conversation on how to best pay and save for education, and strategies for budgeting and making a plan.
Hashtag: #CollegeSavings
Topic: Make College Affordable with Savings and a Plan
When: Monday, August 15 at 2pm Eastern
Easy ways to follow the chat: Twubs or tchat.io
The #CollegeSavings chat will feature these questions for discussion:
- Q1: When is the best time to start saving for college?
- Q2: What are the benefits to saving and creating a plan to pay for college?
- Q3: How can you estimate college costs ahead of time?
- Q4: Can you recommend good resources and tips for finding an affordable college?
- Q5: What are a few unexpected costs that might creep up during college?
- Q6: What are some savings tips for college students to help keep spending low?
- Q7: What are some good savings product options for college savings?
- Q8: Are there any scams people saving and paying for college should know about?
- Q9: What are the benefits of completing the FAFSA?
- Q10: What should recent grads know about their student loans?
Relevant Resources
Share the following resources with your audience and with partnering organizations.
From America Saves
Blog Articles
- Careful Considerations for College Financing
- CSAs are the Next Big Thing You’ve Never Heard of
- Dealing with Back to School Expenses
- How to Avoid a House-Worth of Student Loan Debt
- How to Save or Work, and Minimize Student Loans. Yes, You Can Do It All.
- How Schools Can Help Students Save for College
- Is a 529 Plan the Right Savings Tool for You?
- Layering Certifications: Education without the Debt!
- Less Traditional (and Less Costly) College Options
- Making a Plan for College Savings
- Making the Most of #CollegeSavings
- Minimizing Your Child’s Student Debt
- Planning for College Expenses
- Saving for College, or Not! What I Wish I Knew Then
>> Find more articles on Saving for College, 529 Plans, Student Loans, & College at AmericaSaves.org.
Resources
Other Resources + Research
- College Scorecard, U.S. Department of Education
- FAFSA, Free Application for Federal Student Aid, U.S. Department of Education
- Financial Aid Toolkit, Federal Student Aid
- How America Pays for College 2016, Sallie Mae
- Know Before You Owe: Student loans project, Consumer Financial Protection Bureau (CFPB)
- Paying for College, CFPB
- Saving for College, FINRA
- The Link Between Savings and College Success, CFED
Videos from Better Money Habits
- Estimating Your Child's Cost of College
- How to Finance a Return to College
- The Math Behind Saving for College
College Savings in the News
- How you can avoid college debt; a basic guide, CBS MoneyWatch
- Inside The New 529 ABLE Savings Accounts, Forbes
- Is it ever too early to start saving for college? CNN Money
- Keep an Eye on These College Savings Trends in 2016, U.S. News & World Report
- Out of School, Now What? 6 Things New Grads Should Do About Their Student Loans, LearnVest
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