Saving For College:
Graduating With the Least Amount of Debt
February is National America Saves month. One of the greatest debts we can ecru is that
of paying for our child’s education beyond High School. By June most recent high school graduates
know what college they are going to, but many of them may still not know how they
are going to pay for it. We’ve heard the stats that the average debt students
have upon graduation has skyrocketed to $35,200, according to a recent
Fidelity survey, and that the costs of attending college increase 6%
each year. College is still a great investment for most students, especially
with some planning ahead of time to help keep debt to a minimum. It’s still
true that those with a bachelor’s degree will earn $1 Million more over their
lifetime than those who only complete high school.
The challenge is to graduate with as little debt as
possible. Katie Bryan, America Saves,
lists three ways to help keep student debt to a minimum:
- Create a College Savings Plan
Just like savings for retirement,
it’s good to save early and often. There are many ways out there to help you
save, from a 529 account
to Savings Bonds.
Tip to find extra money to save: If you can save an extra $300 a year ($25 a
month at 5% interest, compounded monthly for 18 years) you will have an extra
$8,766.43 to put towards tuition bills.
Haven’t created a college savings
plan yet? Pledge to Save
with America Saves and you can set your savings goal and create a plan to reach
it. You can even sign up for text message tips and reminders to help you reach
your goal of saving for college.
2. Shop
Around For Schools and Free Money
The Consumer Financial Protection
Bureau created atool to compare the costs of different colleges. Their tool will let
you compare financial aid offers so you can see how all those numbers impact
your payments down the road.
Apply for as many scholarships as
you can. $500 here and $1,000 there can go a long way to helping pay for
college. Many students also stop looking for scholarships once they enter
college, but keep applying each year. Need some inspiration? Check out the
article “How I won$100,000+ in college scholarships” by Ramit Sethi.
3. Find
Ways to Reduce Spending (or Earn Money) While in College
Live at Home – Living on campus
can cost anywhere from $7,500 to $9,000 per year. Consider living at home
during college (if you can) and you can save nearly $40,000. You can still get
a full college experience by joining clubs and being active on campus.
Get a Part-Time Job – Look for a
job on campus or a paid internship to supplement your income and pay for
expenses like food, books, and incidentals while in college. The more you can
pay upfront the less your monthly loan payments will be when you graduate. For more tips on how to save money visit our site americasaves.org.
For more information:
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America Saves, managed by the Consumer
Federation of America (CFA), is a non-profit research‐based social
marketing campaign that seeks to motivate, support, and encourage low- to
moderate-income households to save money and build wealth. Learn more at americasaves.org
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