You might have heard the frightening statistic that 44 million borrowers have a divided 1.48 trillion dollars in student loan debt looming over their heads. Yes, trillion. The Class of 2017 graduated with an average of $39,400 in student loan debt. It’s no doubt college is expensive with the average cost of attendance in Colorado for 2018 being $21,646 for in-state students and $31,887 for an out-of-state student.
As a parent, you’re probably thinking there has to be a way around this! It’s not easy, but with careful planning and focused dedication, it’s possible to save enough so your child can go through college, debt-free. To help you better prepare yourself and your child for the cost of a college education, here are some suggestions to get you started on saving for college.
When to Start
“The best time to plant a tree was 20 years ago. The second-best time is now.”
This quote definitely resonates with savings goals and the best time to start is now! If you don’t have children yet or your children are young, time is on your side. The key is saving early and regularly! If your children are older, it’s great to start saving now and help reduce their tuition costs.
Cost of Tuition
Before executing a savings plan, you’ll need to see your end goal. As mentioned above, the average cost of attendance in Colorado for 2018 is $21,646 for in-state students. Take into account the living expenses as well. Will your child stay at home or will they move out? Will they stay in dorms or in an apartment? Does the University require first-year students to stay in the dorms? Will they need a university dining hall meal plan or be on their own for meals? On-campus housing costs range from $12,000–$14,000 in Colorado.
Now that you have the expectations of how much to save, it’s time to decide how to save. Choosing the right saving method is key to setting yourself up for financial success. RMLEFCU provides different types of savings accounts; Regular Savings, Custom Savings, and Premier Money Market.
If you sign up for the Regular and Custom Savings, you can earn competitive dividends on balances of $100 more with no monthly maintenance fee. The Premier Money Market account earns you competitive, tiered dividends on balances of $2,000 or more to maximize earnings on your higher savings balance.
Dual-Credit High School Classes
Many high schools are focusing more on college preparation and offering dual-credit classes. AP classes also provide an opportunity to earn college credit in high school, albeit a test will need to be taken in order to earn the credit. The more college credit your student can accumulate beforehand, the better! This may even mean graduating early for your child.
There are loads of different, unique scholarships your child can apply for. A lot of websites help you find scholarships that are suitable for your child and that they qualify for. The hard part is applying for them. Anything helps to supplement your college savings fund.
It’s always a great time to talk to your child about money and the importance of saving. If your child has a part-time job, encourage them to save first. This is an important time to build a strong savings foundation and teach them the importance of having an emergency fund in case something happens once they become financially independent.
You can always talk to your child about getting a part-time job in college as well to help with their cost of living and teach them to be financially independent. Nearly 52% of students are working part-time while studying for their degrees. An even better option for your child would be to look into paid internships. On top of receiving money, they are also getting industry experience. It’s a win-win situation.
It’s never too early to be saving for college. By estimating your child’s education expenses, regularly contributing to your savings fund, and involving your child in the process along the way, you’ll give them the money-management tools they need for success. If you have any more questions about our savings accounts, don’t hesitate to give us a call at (303) 458-6660 or stop in a branch to speak to a representative!