Can We Make College More Affordable
Can We Make College More Affordable? Let’s see..
The cost of college seems to be increasing faster than the average middle-class family’s income. However, no parent wants to make their children rely on student loans, which can weave a new graduate with tens of thousands of dollars of debt.
Keep reading to find out if college is really worth it, if your family can afford it, and how to prepare financially for postsecondary education.
College is More Important Than Ever
As the cost of college has risen, so has the necessity of a college degree. The Bureau of Labor Statistics reports on income averages based on educational levels. The median weekly income for a high school graduate is $678. In comparison, a Bachelor’s degree graduate earns an average of $1137 per week. Over a full year, this works out to a gap of almost $24,000 in income. Consider the impact over a lifetime, and you’ll see that a college education is likely your child’s best chance at a solid financial future.
Can You Afford It Out-of-Pocket?
Unless your family has an extremely high income or comes into a large windfall, the chances of being able to pay for college out-of-pocket are slim. According to the National Center for Education Statistics, the average tuition rate for a public four-year institution was $17,474 in 2013. For private institutions, that number increases to $35,074.
Fortunately, you don’t have to hope that your family wins the lottery or suddenly comes into an extra $70,000 a year to pay for college. You can take steps now to plan ahead.
Start Saving Now
I know that it’s hard to save money for something years away when the money doesn’t even seem to last long enough to get through the month. Still, it is highly recommended that you start saving now for your child’s education. With 529 plans, you enjoy significant tax and interest benefits that yield more the earlier you invest. For example, parents in Virginia enjoy a 2% interest rate on 529 plans.
In addition, you can typically deduct all or some of the money you save for your child’s education. This reduces your overall tax burden. For the best deal, compare 529 plans at different institutions. Some charge high fees that reduce the amount of money that actually reaches your child.
Maximize Scholarships and Grants
Scholarships and grants are a huge source of financial aids for students, but few take full advantage of them. Help your child explore their interests and focus on one or two activities that interest them. Strong performance in a sport, musical talent, high grades, or artistic ability can all mean serious scholarship money. If your child participates in contests and competitions from a young age, put away most or all of their winnings for college.
There’s no doubt that college is a huge expense for most middle-class families. A little planning now can save you and your family a lot of money later.
Consider Community College
If I could go back I woudl consider community college for the first two years and it’s definitely in my thoughts for my own girls. I graduated when I was 17 years old… young. Although I had choose my major (music) I really could have gotten a lot of my required subjects like math, history, and science out of the way in community college. Doing this would have saved a bundle and would have given me some time to mature so I could really focus on my major.
According to this, community college is nearly 15% of the cost as a public four year college. Wow… that is a HUGE savings. Going local for 2 years could save you $40,000.
Something to think about.
So what are your plans for college (for your kids or yourself). Do you have any tricks to help us save more and still get that education? Do you think we Can We Make College More Affordable?
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