As we know, college education can help create more opportunities.  However, the cost of college continues to increase every year.  According to this article from msnbc.com, parents are falling behind in saving for  their children’s higher education.  While parents are becoming more savvy about saving for college and starting funds for their children at a younger age, the amount that they are able to save is expected to cover a shrinking percentage of the cost of their education.  While you may feel powerless as the cost of college grows and you hear information like this, keep in mind that any money you are able to stash away now to help cover college costs is less money that will need to be borrowed by either you or your child. 

Here is an example of the savings you could incur by putting aside some money now.  Saving $200 per month for 10 years (total invested is $24,000) at a 3% interest rate will yield $28,018.  If you were to borrow $28,000 at 7.9% (the current interest rate for the parent PLUS loan), you would have a $338 monthly payment for 10 years with a total payback of $40,588.  That’s a significant savings!  So yes, even if you do begin to put aside money, depending on your financial situation, the college your child attends, scholarships and/or grants he or she receives, etc. there could still be a gap between what is saved and what it costs.  But you will be far better prepared if you create a plan now that works for your family than waiting until your child is about to head off to college.

Do you have a child in elementary or middle school?  Have family and friends with kids?  We have some helpful information for you!  Email the Center for College Planning at collegeplanning@nhheaf.org or call 888.7.GRADUATE, ext. 119 and ask us to send you our Early College Planning Guide.

Start planning today,
Val