Why Save for College?
Saving for college can increase the likelihood that the child will enroll in college, adds flexibility to college choice and reduces debt. It is cheaper to save than to borrow. If college savings are in the parent’s name, the reduction in financial aid eligibility is minimal.
How Much to Save for College
Setting reasonable college savings goals and breaking down the amount into smaller, monthly contributions helps parents avoid sticker shock.
When to Start Saving for College
The financial advantages of saving early are significant. However, it’s never too late to start saving to minimize the need to take out education loans.
Easier Ways to Save for College
To make college savings easier, families should start saving for college as soon as possible, set an affordable college savings goal, make the saving automatic and periodically increase the amount saved per month.
College Savings Investment Strategies
There are several investment strategies for maximizing the amount of money available to pay for college, such as starting early, dollar-cost averaging, using a direct-sold 529 college savings plan, minimizing fees, optimizing income tax benefits and minimizing the impact on eligibility for need-based student financial aid. Diversifying investments and using an age-based asset allocation can help minimize risks.
Benchmarking Progress in Saving for College
Parents that start saving for college early can build a sizable college fund. Find out if your college savings plan is on track to reach your savings goal.