In 2021, 44.7 million Americans are facing the burden of student loan debt. They owe more than $1.53 trillion in student loans. These alarming statistics prove the importance of saving for higher education.
In the past, many parents prioritized saving for their child’s college or trade school. However, today students are taking steps to cover the cost of their own higher education and keep their student loan debt to a minimum.
Benefits of Saving for College or Trade School
When students make an effort to save for their education after high school, they get a head start on life with minimal debt. Instead of spending years trying to pay off their student loans, they can focus on other financial goals such as buying a house or saving for retirement. Saving for college or trade school may also motivate students to choose a major that provides job opportunities and encourages them to complete their degree.
How Students Can Save for Higher Education
There are a number high school or college-aged students can save for higher education:
· Apply for Scholarships: Scholarships provide money for college that students don’t have to repay. If they’ve excelled in academics, athletics, or extracurricular activities, it may be in their best interest to apply for scholarships. Even small scholarships can help save hundreds or thousands of dollars on the overall cost of secondary education.
· Enroll in AP Classes: A high school student can earn college credits by taking Advanced Placement or AP classes in high school. The fewer credits they need to complete their degree while in college, the more money they’ll save.
· Work: While balancing classes, homework, and studying while working can be difficult, it’s not impossible. If your student can work part-time or occasionally during the school year or summer, they can save money and build their resume.
· Open a College Savings Account: Your child can help contribute to a college savings account to help grow the money they’re saving for their education.
· Delay College: If your student is serious about graduating debt-free, they may delay college or trade school and work for a few years. Once they have enough saved up, they can begin their higher education journey.
· Attend a Community College: If your student completes prerequisites at a community college initially and then transfers to a public or private four-year university or college, they may save on tuition depending on secondary education costs in your area.
Consult Your Financial Professional
Together we can review your financial situation and develop the ideal college savings plan for your student. Contact us today to get started.
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Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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