Experts estimate that the price tag for today’s kindergartener to attend four years of college will be between $50,000 and $300,000. Right now colleges and taxpayers cover some of the cost, but the average family still pays about seventy percent through loans and direct payments. Poor families pay even less.
Here’s how three families are saving for college.
India Rose from Rapidan, Virginia, is the mother of four children from one to seven years old. She doesn’t think she saves a lot, but she adds to her children’s college funds what she can when she can. “It’s hard because you have to take care of your family’s needs now, but you also have to take care of their future,” she explains. India is also using the UPromise program to add to her children’s accounts.
Kevin Karplus of Santa Cruz, California, chose his state’s 529 savings plan for his son. “I wanted to be able to accumulate a reasonable amount of money in a tax-advantaged way with relatively low risk and little need for active management,” he says. He set up an automatic payroll deduction to meet his savings goal.
Carl Peters from Allentown, Pennsylvania, picked his state’s 529 prepaid tuition plan for his three children. “We didn’t go to college,” explains Carl, “but we want to make sure our kids have that option.” He adds that the regular monthly payment contract helps him keep on track.
What advice do these families have for others? They all agree on one thing: start early. “But even if you’re too late to start early, start anyway,” advises Rose. "Try using your old daycare dollars."
Although most of us won’t be able to foot the entire bill, saving now will do three things. It will tell your kids and everyone else that you’re betting on their future. It will also
- give your child more opportunities and
- cut the number of years that you and your child will be paying back student loans.
The returns on your investment will be worth it. College graduates make an average of a million dollars more during their careers than their peers who have only a high school diploma. Both two- and four-year degrees open doors to good jobs that are closed to kids whose education ended in high school.
Lisamarie Sanders is a Virginia elementary teacher who worked previously with the U.S. Department of Education. She has two children in elementary school.