Saving for College: The 6 Best Questions to Ask
Three things most people find overwhelming: agreeing on a date night restaurant, rush hour traffic, and saving for college. Especially that last one. The cost of higher education has risen pretty dramatically since 1980. A whopping 260% to be exact. The average level of student loan debt is just over $30,000 per student.
If thinking about saving for college makes you break out into a cold sweat, know this: nailing down a higher education funding philosophy is key to reaching your savings goal. In a nutshell, you need to define specifics around how higher education will be funded. Otherwise known as “how are in the world are we going to pay for this?!?”
Determining this philosophy isn’t as complicated as it may sound. Here are six questions to help start the conversation:
- What percentage of our student’s projected education expenses will we agree to finance?
- Do we want our child or grandchild to acquire student loans?
- Will we limit our child or grandchild’s education options by geographic location, prestige, or the schools we attended?
- What type of degrees, majors, and schools — if any — do we favor for our child or grandchild?
- How will we ensure this expense does not put our retirement or future plans in jeopardy?
- How will we communicate these expectations to our child or grandchild?
After you develop your higher education funding philosophy, it’s time to figure out how much you need to save. Using the boundaries set by your higher education philosophy, use one of the many free online calculators to help you get a good idea of the potential cost of college.
The best news is that the CommunityAmerica you already know and love now has Education and Career Planners ready to assist you through this next stage of your life. We are here to guide you through all the phases of college planning, which can (and should) begin while your child is still in single digits. From calculators and checklists to deeper discussions about financial aspects, we can help.