5 College Savings Lessons From Recent Grads
Learning from your mistakes is good. Having the ability to learn from the mistakes of others is even better. A recent study by Fidelity shows that 70% of 2013 college graduates are entering the big, bad world with an average of $35,200 in credit card and student loan debt. That’s insanity. Fortunately for you, it provides some teaching lesson that you and your child can learn from. What can the class of 2013 teach you about saving for education? Read on and learn.
Lesson #1 – Save Early
The math is simple: the longer you have to save, the more you’ll have when your child reaches college age. Tuition costs are increasing by about 7% per year, making it even more crucial to have a 529 savings plan and GradSave account in place by the time your little darling starts toddling around the living room.
Lesson #2 – Teach Your Children About Debt
Thirty-nine percent of graduates surveyed by Fidelity said they would have made different choices if they’d had a better understanding of debt when they started college. Make sure your child has a working knowledge of interest rates, due dates, and the consequences of defaulting on loans.
Lesson #3 – Know the True Cost of College
High tuition costs are bad enough but there are many other big, scary numbers to factor in to the true cost of college. Textbooks, school supplies, room and board, and even meal plans drive the sticker price up even further. Underestimating the amount of money your child will need for school is a big mistake and it can lead to hasty, bad decisions down the road.
Lesson #4 – Look at Career Potential
More than half of the surveyed grads said they considered the hire-ability factor of different majors before making a career decision. This is a great strategy. Graduating from college buried under a mountain of student debt only to realize there’s no market for that shiny degree is horrifying. Help your child choose a major based on their strengths, hopes, and desires, but don’t forget about career potential in the long run! (Sorry, philosophy majors!)
Lesson #5 – Understand That It Takes a Village
The days of parents financing their child’s entire education have come to an end. Eighty-five percent of 2013 grads personally paid into their college costs and 25% offered up $10,000 or more. Consider asking friends and relatives to contribute to your child’s GradSave account to help reduce the burden of debt for everyone.
For more college-savings insights, tips, and news, stay tuned to the GradSave blog!Posted by TheGradSaveTeam
Sun, July 7th, 2013 @06:28AM