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Saving for College in the U.S.

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Monday, January 13, 2020

Many parents in America want to send their kids to college, and they’re saving to make that dream a reality. But are they on track to do so?

Not so much, says a recent study. Although 70 percent of parents want to cover the cost of college completely, they’re only going to be able to cover 29 percent of the cost by the time their kids are ready for college. The other 71 percent will have to be found elsewhere.  A student loan is the obvious choice, but it does burden the student with debt for years to come.

 In 2018, 69 percent of college students signed up for student loans. And the average graduate left college with debt totaling $200 shy of $30,000!  2018 also saw 14 percent of parents taking out an average of $35,600 in Federal Parent PLUS loans. If you already have mortgage payments and car repayments, adding student loans to your monthly outgoing fees can negatively affect your retirement plans.

The average amount saved by parents in the U.S. for their kids' college is $18,000. That is not nearly enough, even if you’re going to send them to a college that is in-state. The College Board reports that the average private, nonprofit college charged $46,950 for tuition, fees, and room and board in the 2017-2018 academic year. That figure is set to rise, so if you have your heart set on a top tier college, you are going to need even more in the future.

Get started on saving for college early or either you or your children will be paying off debt for years to come.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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.

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Contact

Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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