Why You Should Start Saving for College Now
College costs are increasing steadily every year. With this in mind, the sooner you can start saving up, the better. Continue reading to learn more details on why now is the time to establish your college savings.
Reasons to Save Up for College Now
Besides buying a home, college is one of the greatest expenses you'll accrue during your lifetime. The average student that receives a 4-year degree will have an outstanding debt of more than $29,000 in loans. Not to mention, this only covers a standard four years (not adding on an additional semester here or there). To attend graduate school, this number only increases.. With so much money going to universities, you must start saving now!
No Age Discrimination
You can attend college at any time after you complete high school. Because of this, individuals can take out student loans at any age. Just as any student loan doesn't discriminate because of age, neither should your saving. Are you in middle school and just now beginning to think of college? Are you a first-time parent with a little one still in the crib? Are you a grandma who wants to finally get her degree? At any age, saving for college is essential to avoid high student loan bills after college.
Costs Are Rising
According to The Institute of College Access and Success (TICAS), the average student loan debt was $23,450 in 2008 and $29,400 in 2012, which represents a 25% increase. Even more alarming is that that 88% of students attending for-profit colleges have students loans. The reason for this? Colleges are charging more per semester for tuition. In fact, College Board reported that the average cost for tuition at a public 4-year college for the 2015-2016 school year is $9,410 compared to $8,742 for the 2011-2012 term.
Not Completing Degree on Time
Not finishing a degree within the standard time frame can lead to taking out more loans; not to mention more money for accumulating interest fees. In fact, U.S. News & World Report noted that the majority of students don't graduate on time - leading to a whopping $70,000 in school expenses and lost wages. U.S. News also mentioned that universities measure graduation rates for bachelor's degrees after six years rather than four, meaning that for many students there is an extra two years of unplanned college expenses.
Saving Now Is Easy
Whether you're a parent or an adult considering future college plans, saving now is much easier than down the road. Why force yourself into a tight budget for the four years before college begins? Why not start now and live comfortably? Many savings programs are available out there for you to consider.
Upromise by Sallie Mae lets you earn money back toward college tuition while you spend regularly. They have a number of ways you can earn cash back, such as using the Upromise MasterCard, shopping at Upromise.com or opening their GoalSaver account. There's also no limit to how much cash back you can earn.
The Gerber Life College Plan plays two roles - as a college savings account and a life insurance policy. Once your policy reaches maturity, your child can take the money out for college. Choose a 10- or 20-year plan and the amount of money you would like to put in every month. The example they provide is, if you have 18 years to put money into this account, you'll only need to pay $36 a month to reach $10,000 (putting this aside in a safe would only save $7,776). If you can afford more, you'll just get that much more back.
Time is Money
Of course, the longer you have to save, the more money you can put away. Using the Upromise program allows you years to accrue cash back. If you choose to put your money into a high-yield savings account or CD, you'll earn more on interest the longer the money is in there. It just makes sense to start saving now.
Now that you've saved for school, don't let college costs sneak up on you.