Throughout history, education has been played a key role in the individual success story. From the children of families arriving at our shores over two centuries ago to the children of families arriving on our shores today, education has played a big role in the American dream and has been a key element of financial and social success. For most American families, higher education provides their children the skills and critical thinking needed to become independent, productive and happy adults.
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Is a College Education worth it?

Absolutely – it’s about future earnings and independence. Over a lifetime, the earnings gap between Bachelors or Associates degree-holders, and High School diploma-holders widens, and its impact can be significant. Research shows that college degrees produce greater financial success.


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What is College going to Cost?

A lot. Over the past three decades, the cost of tuition has outpaced the Consumer Price Index of inflation, and while there are different ways to approach college, from starting at a 2-year community college, before transferring to a 4-year institution, it does remain expensive.


Based on average tuition and fees for 2014-15 as reported by The College Board® and assumed to increase 5% annually. (This is a hypothetical example for illustrative purposes only.)

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How do Families Typically Save for College

Most families use a combination of savings, scholarships/grants and borrowing to pay for college. In 2017-2018, parent income and savings was the #1 source of college funding. Nearly half (47%) of college costs were paid out of pocket by a combination of parents’ and student’s income and savings.

Source: How America Pays for College 2018 National Study by Sallie Mae & Ipsos (https://www.salliemae.com/about/leading-research/how-america-pays-for-college/)

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Concerns with Borrowing

At over $1.3 trillion, national student debt is at historic highs, exceeding both the nation’s credit card and auto loan debt levels, with no end in sight. Student debt stays with an individual for their lifetime – and sometimes beyond – and plays a large role in how soon college graduates are able to purchase their first home, or start their own family.

Previous generations have funded higher education through indebtedness, but with tuition rising faster than inflation, it is not sustainable for many families to take out higher interest rate loans and simultaneously cut expenses enough to cover college costs. By starting early to save for college, one will need to borrow less, if at all, when ready for college. In other words, it’s cheaper to save now, than it will be to borrow later.


So how can a family hope to prepare itself financially to meet these costs? Save little and save often. Put time on your side.

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State of College Savings

Saving is a critical piece in a family’s overall college financing strategy. The College Savings Foundation’s annual State of College Savings survey of 800 parents showed that those parents who invested in 529s and those who habitually saved with automatic savings plans – each saved more than parents without them. Start with regular contributions – and put time on your side.


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