David Lerner Associates: Why College Saving is Important
A college education can be an expensive proposition. Beside the tuition costs, there are many other expenses that have to be met. Whether your child is going to college in your hometown or away, costs can become a real burden.
The College Board estimates that the average student in America spends around $1,200
a year on books and supplies. A single book can cost as much as $200. [1] Factor in transportation, accommodation, sports equipment and uniforms – not to mention food and fun, and the costs mount up fast.
While some students work to help out with costs, many prefer to be able to concentrate on school alone. And when you add social activities and clubs to their lectures and study time, there’s not much left over.
Although many students take out loans to cover their education costs, this can be a financial burden for years to come. The class of 2015 is the most indebted ever with the average debt close to $35,000. [2] This financial pressure can add stress to an already difficult situation – leaving home, disruptive changes in their lives, and dealing with examinations.
To avoid this stress on the kids, many parents take on the debt – about 17% of graduates have parents with loans out on their behalf. And the average debt for parents has crept up to $30,867 this year from $29,684 in 2014. [2] Putting money aside for college can avoid all this stress and make college a pleasurable experience for both parents and students.
Starting out in life debt free with a college degree is one of the best gifts you could give a child today. The degree offers them a brighter future, as graduates tend to earn more than those that did not go to college.[3] Saving for college also teaches them the value of preparing for a life event in the future.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.