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.
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